A year ago, I was in New York for a Climate Change Strategy meeting while working for The Nature Conservancy. I was not alone in noticing the irony in the fact that it was a warm day, the building's heating system was cranking, and we had to open the windows to regulate the temperature.
How much energy was being wasted in that building and throughout that city. I wondered at the time whether retrofitting the HVAC infrastructure in cities around the world couldn't be a major contributor to reducing greenhouse gases.
Now, Reuters reports on a new study from the McKinsey Global Institute (MGI) that says "squeezing more productivity out of the energy that industries, homes and vehicles burn is the most economical way to stifle rising energy demand and control output of planet-warming gases.
"For decades, many countries have mostly invested in finding more supplies of oil, gas and coal to meet the rising energy needs of growing populations, but as energy costs and global warming concerns rise, interest in investing in ways to slow energy demand is beginning to take hold.
"Slowing global energy waste at industries like pulp and paper, oil refining and steel, homes and cars could more than halve global energy demand growth from current levels of 2.2 percent a year, according to the report, "The Case for Investing in Energy Productivity," released by the MGI on Thursday at a United Nations Investor Summit on Climate Risk."
Initial global investments would total about US$170 billion per year. But they would pay for themselves through energy savings, with an average internal return rate of 17 percent, the report said.
Industries would need to invest about US$83 billion per year, homes would need to invest about $40 billion and transport and commercial sectors will need to invest $25 billion and $22 billion a year, respectively.
Less burning of fossil fuels like coal, oil and natural gas as a result of the efficiencies would cut greenhouse gas output, the report said.
Getting companies to change their energy habits, however, is no easy task.
John Holdren, a climate expert at Harvard University, told investors efficiencies can be helpful in slowing global warming, but that much more needs to be done, such as developing new fuels and methods to bury carbon emissions, to stop catastrophic consequences such as flooding from rising seas.
The bottom line: We need an expansive portfolio of solutions. Energy Efficiency should be one part of that portfolio.