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From the broadest -- and somewhat abstract -- perspective, “energy efficiency” refers to how much it takes in total energy use to sustain the economy’s output of goods and services. By that measure, the United States has done quite well -- lowering its energy/GDP ratio by nearly half since 1973.
That overall improvement has been shaped by two underlying forces: structural shifts in the economy -- e.g., a proportionately faster growth in (less “energy intensive”) services than in (more “energy intensive”) manufacturing; and successful adoption of energy-conservation practices in given sectors of economic activity.
It is such adoption of energy-conservation practices that moves attention from the macroeconomic (i.e., energy/GDP) spotlight down to the level of specific energy-using activities in the industrial, commercial, residential, and transport sectors of the nation. Here, no simple interpretation of developments emerges, since the factors motivating changes in energy use can be quite varied. For example, technical innovation that makes a manufacturing process or other activity more energy sparing and prescriptive governmental standards -- ideally consistent with cost-effectiveness -- cover areas as varied as household appliances and automotive fuel-economy requirements. Alongside these two sets of energy conservation impulses, there is the critical matter of how changes in energy prices -- either independently or in concert with technological change and regulation -- shape energy outcomes.
Thus, the coupled effect of increased fuel prices and adoption of CAFE standards dating from the 1970s clearly conditioned the flat trend in gasoline use until about the mid-1980s Just as clearly, the declining trend in oil prices over much of the subsequent 15-year period stimulated the rising gasoline demand necessitated, in large part, by the exploding SUV market.
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Panel: Energy Efficiency
Understanding Transatlantic Differences
An RFF Co-Hosted Seminar
Speakers address approaches to energy efficiency, the role of government, and the correct response to market failure. |
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