Energy end-use efficiency

Since the 1970s more efficient energy use in OECD countries has weakened or eliminated the link between economic growth and energy use. At the global level just 37 percent of primary energy is converted to useful energy - meaning that nearly two-thirds is lost. the next 20 years percent in most industrialised countries and more than 40 percent transition economies. Dematerialization and recycling will further reduce energy intensity. Thus energy efficiency is one of the main technological drivers of sustainable development word-wide. Energy policy has traditionally underestimated the benefits of end-use efficiency for society, the environment, and employment. Achievable levels of economic efficiency depend on a country's industrialisation, motorization, electrification, human capital and policies. But their realisation can be slowed by sector- and technology-specific obstacles - including lack of knowledge, legal and administrative obstacles. The external costs of energy taxes, environmental legislation, and greenhouse gas emissions trading. There is also an important role for international harmonisation of regulations for efficiency of traded products. Rapid growth in demand provides especially favourable conditions for innovations in developing countries - enabling these countries to leapfrog stages of development if market reforms are also in place. The economic potentials of more efficient energy use will continue to grow with new technologies and with cost reductions resulting from economies of scale and learning effects. Considerations of the second law of thermodynamics at all levels of energy conversion and technological improvements at the level of useful energy suggest further potential for technical efficiency of almost one order of magnitude that may become available during this century. Finally, structural changes in industrialised and transition economies - moving to less energy - intensive production and consumption - will likely contribute to stagnant or lower energy demand per capita in these countries.