Steel plant. Photo credit: Shutterstock

A new global index commissioned by Philips ranks countries by their energy productivity performance and finds the US in 38^th position trailing the likes of Japan (24^th) and Germany (17^th). The “2015 Energy Productivity and Economic Prosperity Index – How Efficiency Will Drive Growth, Create Jobs and Spread Wellbeing Throughout Society” report – authored by Ecofys, the Lisbon Council, and Quintel Intelligence – sheds light on the tremendous potential of improved energy productivity for “rais[ing] economic performance and extend[ing] significant environmental and social benefits” to societies. Source: Philips

According to the report, a staggering 98 per cent of energy is wasted and only “a modest rise in energy productivity will boost the economy, create jobs and contribute to saving the environment.” Various country-specific energy productivity scenarios show, for example, that “overall energy consumption in the EU could [simply] be cut by 35% by doubling the region’s rate of energy productivity improvement from currently roughly 1.6% to 4% per year by 2030.”

However, the report also warns that the current rate of energy productivity improvement is not fast enough to keep up with the projected demographic trends and long-term economic growth patterns, which inevitably will lead to rising energy demand and further resource extraction as well as depletion. In this respect, the problem is not a lack of critical technology, rather “vastly more efficient machinery and energy sources” at mankind’s fingertips are deployed too slowly for a myriad of reasons.

Here are some other interesting findings from the study:

1. A doubling of energy productivity could reduce the global fossil fuel bill by more than €2 trillion – at the same time potentially creating more than six million jobs globally by 2020.
2. 98 per cent of all energy used during production/manufacturing is not being converted into ‘useful’ services and products but is instead wasted.
3. Since size matters with respect to energy consumption, improving further on the already existing levels of energy efficiency in the world’s largest economies will yield significant reductions in energy consumption on a global scale. Interestingly, the report says that the “world’s largest economies were able to produce on average 18% more GDP in the last 10 years thanks to the energy savings they have already made” while during the same period in the EU, “improving energy efficiency helped facilitate an additional 17% of economic growth at the same level of energy consumption.”
4. Developing countries in particular have “an inbuilt advantage” because they can benefit from developed countries’ historical experiences, in addition to the availability of new technology that can allow developing nations to “‘leapfrog’ the developed world and move speedily towards cost-saving energy-productivity levels.”

Source: Philips

Remember, energy productivity – i.e. amount of GDP produced for every unit of energy consumed – must be distinguished from energy efficiency, which is simply using less energy to perform the same functions.

Read the entire report for sub-indicators and country-focused scenarios.