Energy Efficiency Could Cut Decarbonizing Costs by $2.8 Trillion

Share Button

Energy efficiency can reduce the cost of decarbonizing the economies of the U.S. Brazil, China, Europe, India, and Mexico by up to $250 billion per year, according to a new report.“How Energy Efficiency Cuts Costs for a 2° C Future.”

The report estimates savings of $2.8 trillion by 2030 if the countries use a high energy efficiency pathway to decarbonize. This approach would reduce carbon at no net cost to society, said the report funded by ClimateWorks and conducted by a consortium of groups led by Fraunhofer ISI.

In all, energy efficiency could reduce carbon emissions by 11 billion metric tons in 2030 — roughly two-thirds of the cuts needed to limit warming to 2° C, said the report.

Savings varied by nation, ranging from 0.1 to 0.4 percent of annual GDP. The savings was not sensitive to macroeconomic shifts or to changes in fuel price.

“It is of the utmost importance to address why many of the cost savings due to EE are not yet being realized by markets, private investors and households,” the report said.

Eliminating subsidies for fossil fuels and putting a price on carbon would accelerate use of energy efficiency. The report also suggested using internal rate of return rather than payback to calculate the economics of efficiency measures.

The report also pointed out that by combining energy efficiency and low-cost renewables, for the next 15 years nations could avoid broad use of carbon capture and sequestration – a costly way to reduce carbon in power plants.

On the positive side. the U.S. is poitioned to reduce carbon through fuel economy standards and the Clean Power Plan, the Obama administration’s new rule that requires an 870 million ton cut in carbon from power plants by 2030, a 32 percent drop over 2005 levels. But the nation could do more by creating greater incentives for building retrofits and reductions in fuel use by energy-intensive industries, the report said.

ClimateWorks suggests that the nations apply the cost savings achieved through energy efficiency toward bringing electricity to the energy poor. The World Bank shows that the world can achieve universal access to electricity through investments between $40 billion and $100 billion annually. The $250 billion saved in the regions studied could help finance this critical goal.

“How Energy Efficiency Cuts Costs for a 2° C Future” is available for free download.

Follow us on Twitter @EfficiencyMkts.

Share Button

About Elisa Wood

Elisa Wood is the chief editor of She has been writing about energy for more than three decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.


  1. The DOE states that for every 1 million Btu’s of heat energy that is captured from combusted natural gas and this recovered heat energy is utilized, 117 lbs of CO2 will not be put into the atmosphere. Being vented will be Cool exhaust, some days even cooler than the outside air temperature.
    Water Conservation. In every 1 million Btu’s of combusted natural gas are 5 gallons of recoverable water, and this distilled water is very usable.
    At the electricity producing power plants the recovered heat energy and CO2 and water can be utilized to grow food or produce algae. At night when photosynthesis does not happen the CO2 can be transformed with Carbon Capture Utilization into useful – saleable products.
    Yes, Increased Energy Efficiency and CCU can cut Decarbonizing BY A Lot.
    And the process creates jobs and profits.


  1. […] to conserve electricity and boost recycling. (Collegiate Times) • Energy efficiency could significantly reduce costs of cutting carbon. (Energy Efficiency […]