With current policies, European energy demand will grow at 1.2 percent a year to 2020. However, with companies fully engaged in boosting energy productivity—the output achieved from the energy we consume—Europe could hold energy demand at today’s levels. If Europe captured the full potential to increase energy productivity, the continent could abate energy demand equivalent to 8 million barrels of oil per day, or double the final electricity consumption of all EU-25 countries today. Solely using available technologies offering positive returns, Europe could at the same time reduce greenhouse gas emissions by almost 1 billion tons in 2020—more than the combined CO2 emissions of the United Kingdom and France.
Europe represents 17 percent of global energy consumption, less than the 22 percent of the United States, the world’s largest energy consumer, but more than China, which is at 14 percent. Yet energy intensity (the energy used to generate GDP) varies significantly across the region. Northwestern Europe’s economy runs at a relatively low level of energy intensity of 7,200 BTUs per dollar of GDP. The energy intensity of Northeastern Europe is almost twice as high, slightly above the global average of 12,600 BTUs per dollar of GDP. Meanwhile, Southern Europe falls between the two with an energy intensity of 8,300 BTUs per dollar of GDP, similar to that of the United States. The CO2 intensity of the three European regions follows a very similar pattern to energy intensity.
With growth in the size of homes and most industrial sectors and increased car penetration across Southern and Northeastern Europe, MGI projects that European energy demand under current policies will grow by on average 1.2 percent a year to 2020. Energy demand will grow at 0.9 percent a year in Northwestern Europe, 1.6 percent in Southern Europe, and 1.7 percent in Northeastern Europe. However, Europe could halt overall growth in energy demand through a concerted effort to boost energy productivity.
European companies now recognize the energy savings that higher efficiency delivers at today’s sky-high energy prices, yet they are achieving only a fraction of the sizable commercial opportunities promised by innovation on this front. MGI identifies seven major categories of business opportunities: building-technology products, electrical devices, transportation, transparency-creating products, customized solutions, energy services, and financing of investments.
Europe is in a strong position to play the role of catalyst in promoting higher energy productivity around the world. As European companies bid to become market leaders in energy-efficiency, it is useful that public policy is setting incentives that should act as a springboard to their efforts. The European Commission estimates that Europe wastes at least 20 percent of its energy and has responded by implementing energy efficiency standards that are often much higher than in other regions such as North America or Asia’s emerging markets.
Fueling sustainable development: The energy productivity solution By choosing more energy-efficient cars and appliances, improving insulation in buildings, and selecting lower-energy-consuming lighting and production technologies, developing countries could cut their annual energy demand growth by more than half from 3.4 to 1.4 percent annually over the next 12 years. This would leave energy consumption some 22 percent lower than it would otherwise have been—an abatement equivalent to the entire energy consumption of China today.
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The carbon productivity challenge: Curbing climate change and sustaining economic growth Meeting commonly discussed greenhouse gas abatement paths by 2025 while maintaining economic growth will require a tenfold increase in "carbon productivity," the amount of GDP produced per unit of carbon equivalents emitted. The macroeconomic costs of this "carbon revolution" are likely to be manageable at some 0.6–1.4 percent of global GDP by 2030. Read more
The case for investing in energy productivity Additional annual investments in energy productivity of $170 billion for the next 13 years could cut global energy demand growth by at least half while generating average internal rates of return of 17 percent. Such outlays would also achieve significant energy savings and cuts in greenhouse gas emissions. Read more
Leapfrogging to higher energy productivity in China By taking advantage only of currently existing technologies that pay for themselves, China could further its ongoing efforts and reduce total energy demand in 2020 by as much as 23 percent. Lower energy demand would also mean that China could cut its projected oil imports by up to 15 percent and its CO2 emissions by at least 20 percent by 2020. Read more
Wasted energy: How the U.S. can reach its energy productivity potential By capturing the potential available from existing technologies, the United States could cap U.S. energy consumption, as well as its greenhouse gas emissions, at today's levels.
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Curbing global energy demand growth: The energy productivity opportunity There is a large opportunity to contain accelerating energy demand growth in practical, cost-effective ways and, in the process, cut CO2 emissions.
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What is energy productivity? Learn more about this concept and how it applies to policy goals.
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