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How to ramp up energy efficiency investment for Europe’s net-zero emissions future
(EurActiv, 24 Jan 2019) Making finance and investments sustainable is essential to achieving a net-zero emissions world by 2050. And energy efficiency has the single biggest role to play, writes Peter Sweatman.
Peter Sweatman is the founder and CEO of Climate Strategy, a consulting firm. Peter has held senior positions at JPMorgan, and Climate Change Capital managing Iberian and Latin American business units. Currently, Peter is the task group lead for G20 on energy efficiency finance and the rapporteur for the Energy Efficiency Financial Institutions Group (EEFIG).
Energy efficiency is the largest single player in delivering a carbon neutral economy in Europe by 2050, and the Paris Agreement, where energy efficiency actions account for a 44% share of the greenhouse gas reductions required.
The good news is that global energy efficiency investments have solid returns, and grew 3% in 2017 to US$ 236 billion, according to the International Energy Agency’s latest findings. To give context to this figure, this is 13% of the world’s total energy investments (US$ 1.8 trillion); 80% of what is being invested in renewables generation (US$ 298 billion); but, disappointingly, 20% less than global fossil-fuel consumption subsidies of over US$ 300 billion.
And despite the fact that energy efficiency pays back its up-front investment on average three times in lifetime energy savings (and this is before including non-energy benefits), global investment rates are not growing fast enough to meet our increasingly urgent climate targets.
So why is progress so slow?
It’s hold-ups in the delivery and distribution of our product: energy savings and the benefits of renewal. To invest US$ 236 billion in energy efficient buildings, businesses and vehicles requires tens if not hundreds of millions of unique decisions. This compares to tens of thousands of decisions to invest US$ 298 billion in renewables, or just hundreds to deploy fossil-fuel subsidies.
EurActiv, 24 Jan 2019: How to ramp up energy efficiency investment for Europe’s net-zero emissions future
