Political will, not wealth, key to real improvements in energy efficiency

At the end of this year, the targets set by the United Nations in 2000 for developing countries will expire. In this project, we take those Millennium Development Goals and examine how some communities in the United States measure up. We have applied each goal to the U.S. by looking at an indicator used to measure a country’s development success and interpreting it for a specific community in America. The eight goals are: eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empower women, reduce child mortality, improve maternal health, combat HIV/AIDS and other diseases, ensure environmental sustainability, and develop a global partnership for development. One of the indicators for the seventh goal — to ensure environmental sustainability — is energy efficiency. In this piece, we compare the progress that the U.S. has made in this category with that of Uruguay, a much poorer country whose political will makes up the gap.

When it comes to improving energy efficiency, it is widely assumed that wealthier countries are better positioned to develop the technology and enact policies to do so.

But as a comparison of energy trends in the United States and South America's second-smallest country, Uruguay, shows, the key to success may be clear decision-making.

“Seven years ago, we launched a policy for … energy demand, production and the energy mix, backed by all political parties in parliament, with strong public and social support,” said Ramón Méndez, Uruguay’s national director of energy until this year, when he became the country’s lead climate negotiator for the U.N. climate conference in Paris, which took place earlier this month.

“This overall has allowed us to make dramatic changes in very few years,” he said.

In a short time, Uruguay nearly halved its energy intensity — or the measure of the energy efficiency of a nation’s economy, calculated as units of energy per unit of GDP. It is calculated in British thermal units (BTUs), or the amount of work needed to raise the temperature of 1 pound of water 1 degree Fahrenheit. A high energy intensity indicates a high price of converting energy into GDP.

Data from the U.S. Energy Information Agency show that Uruguay’s energy intensity fell from 11 to 7.6 thousand BTUs per dollar from 2002 to 2011. 

U.S. energy intensity fell from 12.1 to 7.3 thousand BTUs per dollar from 1980 to 2011.

The data imply that both countries are doing more with less energy. But energy intensity is influenced by factors such as population, natural resources, changes in industrial activity and offshoring of energy-intensive industries.

The data obscure the fact that Uruguay’s industrial sector tripled from 2002 to 2011 while the U.S. offshored much of its heavy industry. The figures also don’t account for whether the energy used comes from fossil fuels or renewable energy sources like solar and wind.

Uruguay met its industrial energy demand with 85 percent renewable sources, and the country’s electric power sector last year was 95 percent powered by a mix of green energy sources, including wind, biomass, hydropower and solar.

Overall, the country’s energy use was 65 percent powered by renewables, Méndez said. “We have decreased energy intensity in a framework where there was a huge increase in demand in the industry sector,” he said.

The U.S. nearly halved its energy intensity over 35 years, largely because of improvements in energy efficiency — due to changes in building codes, vehicle fuel standards and the Energy Star labeling program for electric appliances, for example — according to a report by the American Council for an Energy Efficient Economy (ACEEE) that was released in June.

But nearly half those energy savings came from changes to energy intensive sectors, including America’s moving away from heavy manufacturing, which was offshored, the report said.

The U.S. has a long way to go, the report said, adding that it could double its efficiency improvements if federal, state and local policies made it a stronger priority.

“We need to do three things — use less energy on the consumer side, we need to use the right kind of electricity, and we need to use less energy on the supply side,” said Radha Adhar, an energy expert with the Sierra Club.

The U.S. could improve and expand on existing building codes and appliance energy efficiency standards, increase the amount of renewables in the energy mix and improve overall efficiency in utilities, she said.

Uruguay’s government made energy policy a priority in 2008, when it decided to invest $7 billion, or about 16 percent of its GDP for one year, to overhaul its energy efficiency.

It was a “huge amount of money,” Méndez said. Public and private funds were invested in the energy sector to improve efficiency. The country created monitoring systems to measure efficiency in electric equipment and built a “whole environment to promote energy efficiency,” he said.

Meanwhile, it launched a public awareness campaign about energy use and adaptation to climate change stressors.

Méndez said Uruguay’s friendly regulatory environment and government investment in renewable energy encouraged investors to put more funds into research and development. Strong public-private partnerships allowed quicker advances in green energy, he said.

In the U.S., however, government subsidies are still supporting fossil fuel production, even as President Barack Obama has touted growth in the green energy sector. The U.S. government spends over $20 billion a year on subsidies for the production of oil, coal and gas, a report by Oil Change International found.

Critics say those resources should be used to boost the role of energy efficiency in electric, gas and water utilities or to subsidize renewable energy sources.

But implementing such actions have been difficult, since the Republican-controlled Congress has consistently stood in the way of advancing policies to fight climate change. 

Republicans in Congress plan to spend 29 percent less on research into renewable energy than Obama requested in his budget, according to the Senate 2016 fiscal year Energy and Water appropriations bill.

“There is a need to build political support for energy efficient policies,” the ACEEE report said. “In recent years some policymakers have bristled at any suggestion of a significant government involvement or expenditure, and the efficiency-related items the two parties can agree on have become more limited.”