The relevance of multiple impacts of energy efficiency in policy-making and evaluation

Panel: 2. What's next in energy policy?

This is a peer-reviewed paper.

Authors:
Johannes Thema, Wuppertal Institut for Climate Environment and Energy, Germany
Felix Suerkemper, Wuppertal Institute for Climate, Environment and Energy, Germany
Jana Rasch, Wuppertal Institute for Climate, Environment and Energy, Germany
Johan Couder, University of Antwerp, Belgium
Nora Mzavanadze, University of Manchester, United Kingdom
Souran Chatterjee, Advanced Buildings and Urban Design, Hungary
Martin Bo Hansen, Copenhagen Economics
Stefan Bouzarovski, University of Manchester, United Kingdom
Stefan Thomas, Wuppertal Insitute for Climate, Environment and Energy, Germany
Diana Ürge-Vorsatz, Advanced Buildings and Urban Design, Hungary
Jens Teubler, Wuppertal Insitute for Climate, Environment and Energy, Germany
Sabine Wilken, Copenhagen Economics, Denmark

Abstract

Improvements in energy efficiency have numerous impacts additional to energy and greenhouse gas savings. This paper presents key findings and policy recommendations of the COMBI project (“Calculating and Operationalising the Multiple Benefits of Energy Efficiency in Europe”).

This project aimed at quantifying the energy and non-energy impacts that a realisation of the EU energy efficiency potential would have in 2030. It covered the most relevant technical energy efficiency improvement actions in buildings, transport and industry.

Quantified impacts include reduced air pollution (and its effects on human health, eco-systems), improved social welfare (health, productivity), saved biotic and abiotic resources, effects on the energy system and energy security, and the economy (employment, GDP, public budgets and energy/EU-ETS prices). The paper shows that a more ambitious energy efficiency policy in Europe would lead to substantial impacts: overall, in 2030 alone, monetized multiple impacts (MI) would amount to 61 bn€ per year in 2030, i.e. corresponding to approx. 50% of energy cost savings (131 bn€).

Consequently, the conservative CBA approach of COMBI yields that including MI quantifications to energy efficiency impact assessments would increase the benefit side by at least 50–70%. As this analysis excludes numerous impacts that could either not be quantified or monetized or where any double-counting potential exists, actual benefits may be much larger.

Based on these findings, the paper formulates several recommendations for EU policy making:

(1) the inclusion of MI into the assessment of policy instruments and scenarios,

(2) the need of reliable MI quantifications for policy design and target setting,

(3) the use of MI for encouraging inter-departmental and cross-sectoral cooperation in policy making to pursue common goals, and

(4) the importance of MI evaluations for their communication and promotion to decision-makers, stakeholders, investors and the general public.