Unlocking energy efficiency in the U.S. economy

 
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Press coverage of energy, whether from fossil fuels, nuclear, or renewables, tends to be dominated by talk of production. Production is only half the story, though: Every energy equation is a balance between generation and consumption, and both count equally.

As concern has risen about climate change, fossil fuels, and nuclear power, energy efficiency has attracted increasing attention. A 2009 study by McKinsey & Company, “Unlocking Energy Efficiency in the U.S. Economy,” looks at the potential benefits of reducing energy consumption.  The study concludes that:

  • Using existing technology at scale, U.S. energy consumption could be reduced by 23% in 2020 from current levels.
  • The resulting savings would be $1.2 trillion for a cost of $520 billion, a net gain of $680 billion
  • Such a program would avoid emitting up to 1.1 gigatons of greenhouse gases annually.

In addition, an earlier McKinsey report, “Curbing Global Energy Demand Growth: The Energy Productivity Opportunity,” calculates that energy productivity investments have an internal rate of return of 10% or more. A related paper by the Widener University School of Law, “Stabilizing and then Reducing U.S. Energy Consumption: Legal and Policy Tools for Efficiency and Conservation,” provides a useful guide to realizing the potential benefits of energy efficiency.

Tags: carbon, greenhouse gases, conservation, technology

    Writer: | Last updated: July 23, 2009

    Citation: McKinsey & Company, "Unlocking energy efficiency in the US economy", McKinsey & Company, July, 2009.
     

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