Energy efficiency developments in IEA countries 30 years after the oil crisis

Panel: Panel 5. Evaluation and monitoring

Author:
Fridtjof Unander, International Energy Agency

Abstract

This paper presents findings from a study that examines how energy efficiency and factors such as economic structure, income, lifestyle, climate, prices and fuel mix have shaped developments in energy use and CO2 emissions in IEA countries since the first oil price shock in 1973.

The results show that IEA countries have made significantly progress in energy efficiency since 1973. However an alarming finding is that energy savings rates across all sectors and in almost all countries have slowed since the late 1980s. This indicates that the oil price shocks in the 1970s and the resulting energy policies did considerably more to control growth in energy demand and CO2 emissions than energy efficiency and climate policies implemented in the 1990s.

Energy price developments offer some explanation of these long-term trends. The lower prices that followed the high price period of 1973-1986, combined with the fact that energy intensities were already significantly reduced resulted in considerably lower energy expenditures for both industry and private consumers from the mid 1980s. The energy share of total production cost in some industries fell by as much as 50% from the early 1980s until the late 1990s. Similarly, the share of energy costs for stationary uses in IEA household budgets fell by 20-50% over the same period, while the fuel cost per kilometre driven by private cars fell between 20% and 60%, depending on the country.

The slowing rate of energy efficiency improvements is the primary reason for the weaker decoupling of CO2 emissions from GDP growth since 1990. Failing to accelerate improvement of energy efficiency would thus have serious implications for many countries prospects of controlling growth in future emissions.