The greatest and most immediate threat to our global environment comes from our use of fossil fuels to power our consumer-capitalist industrial system. However we already know how to dramatically reduce our energy use without seriously compromising our quality of life. In fact we may save money even as we save the Earth.
“Increasing energy end-use efficiency … is generally the largest, least expensive, most benign, most quickly deployable, least visible, least understood, and most neglected way to provide energy services.”  (Lovins, pdf 340 k) Between 1975 and 2005 the energy intensity of the U.S. economy (ratio of primary energy end uses to GDP) decreased by 46%. The energy thus liberated for other uses by greater efficiency was four times as much as the energy provided by new generation facilities, and its cost was equivalent to about $12 per barrel of oil (in 2000 $). Yet the potential of energy end-use efficiency is invisible to many investors and policy makers.
It is not uncommon that only 10% of primary fuel energy ends up delivered to an end use (water moving through a pipe, cold beer, a hot shower). This means that any increase in the efficiency with which the delivered energy is converted into the end use compounds into ten times as much primary energy saved. The end-use saving also cuts the capital cost of both generation and delivery (for example the cost of pumps), commonly saving money as well as energy for those alert to the saving. Remedies can be as simple as straightening convoluted piping and using fatter electrical wiring (Climate: Making Sense and Making Money, pdf, 462 k).
DuPont corporation has already reduced its greenhouse gas emissions by over seventy percent, and saved $2 billion in the process. Five other large corporations reduced their emissions by more than sixty percent and collectively saved another $2 billion. A rapidly-growing number of companies and local governments is discovering that efficiency pays. The Rocky Mountain Institute s Amory Lovins has long championed energy efficiency and offers extensive guidance on what can be done. A local advocate of and resource for this approach is The Natural Edge Project, hosted by Engineers Australia.
Energy savings in the range of 60-80 percent have already been demonstrated at medium to large scales in buildings and in industry, and best practice demonstrates even greater savings. Retrofitting of buildings can have a payback time of only a few years if all potential savings are realised, and proper pricing of carbon emissions would make it even more cost effective. Careful retrofitting can result in a more pleasant workplace that makes people more productive, and the savings resulting from happy people can be many times the savings in energy costs.
Hybrid vehicles already demonstrate 50% fuel savings, and higher savings are predicted for the hypercar concept, using new materials and vehicular construction systems whose mass-production cost would be similar to present costs.
An even more effective strategy to reduce transportation costs is to integrate residences with workplaces, and thus reduce commuting. Dispersed and locally-integrated retailing and local food production would also reduce transportation costs. Highly centralised malls and big-box retailing should be discouraged. We can learn from the better modern European cities that are compact, livable and easy to get around in. We can learn more from the Brazilian city of Curitiba, which has 70% ridership on an efficient, comprehensive bus system carefully integrated with residential development and costing only 1% of Sao Paolo s subway. A guiding principle is that transportation is a symptom of being in the wrong place.
The current discussion of energy is focussed almost entirely on alternative production (renewables, nuclear, clean coal). This focus not only misses our best opportunity efficiency but misses the compounded benefit of efficiency plus renewables. As energy demand is reduced by efficiency, renewable energy production becomes both more adequate and more cost-effective in terms of cost per task accomplished.
The Pentagon-funded report Winning the Oil Endgame offers a roadmap to wean the U.S. off imported oil by 2040 and off oil completely by 2050. Investment of $180 billion over a decade could lead to perpetual savings of $70 billion per year, so the net cost isnegative. This startling outcome is the projected result of a smart mix of policies and private innovation: government and military purshases targeted to accelerate the manufacture of existing innovative designs and technologies, subsidies to the development of new technologies, removal of perverse subsidies, feebates (fees on inefficient vehicles funding rebates on efficient vehicles), assistance to the poor, who otherwise would remain backwaters of inefficiency, and clear signals to markets promoting private innovation and efficiency. The projected savings also result from more fully accounting for externalised military, social and environmental costs of oil dependency. Much of this analysis transfers readily to Australia.
Even a relatively conservative study by the Clean Energy Future Group (pdf 1.2Mb) shows how Australia s stationary energy needs could be met while cutting greenhouse gas emissions from these sources by 50% in 2040 using only technologies that are currently commercially established, with the main energy sources being natural gas, cogeneration, biofuels, wind, and solar. TheAustralian Business Roundtable on Climate Change has called for strong and clear policies to improve energy efficiency and reduce greenhouse emissions, including a long, loud and legal campaign to establish a carbon price signal in Australia.
The efficiency-plus-renewables approach is going mainstream in the United States, where Democrat presidential candidates John Edwards, Barack Obama and Hillary Clinton all announced programs that are light-years ahead of the Bush-Howard approach and far more assertive than Labor s. Edwards program has much in common with that of the Apollo Alliance. Although these programs have significant differences, there is a much greater stress than previously on efficiency, profitability, more jobs than business as usual, and a revitalisation of rural America.
1. Lovins, A.B., Energy End-Use Efficiency. 2005: InterAcademy Council, Amsterdam, www.interacademycouncil.net.