Menu
Choices have consequences, whether directly or indirectly. For example, the oil and gas industry now supports as many as 10.3 million jobs within the United States.174 The statistics bear that out. But it is also true that our use of oil and gas resources contributes about two-thirds of the nation’s energy-related carbon dioxide emissions.
The United States (US) economy needs a reboot for the 21st century—one that simultaneously addresses its social, economic, and environmental health, as well as its long-term resilience. Recovery from the COVID-19 recession offers an opportunity to “build back better” by investing in both people and infrastructure such that the US economy’s overall performance is decidedly more energy and resource productive, as well as more sustainable and resilient. The 20th century economy (and before) depended heavily on resource extraction and manufacturing, and while these remain important activities within the marketplace, it is the high-level performance of all sectors of the economy—whether they produce goods or services—that will contribute to the larger social well-being of the entire nation.
An economic assessment of the 2019 Draft Arlington County Community Energy Plan (population 237,100) suggests that investments in greater energy efficiency and renewable energy technologies could drive an average energy bill savings of $245 million per year for county businesses and residents. The combination of program efforts, investments and energy bill savings across the Arlington economy will also drive a net positive gain of 1,700 jobs within the region.
There is no definitive or trusted number that lays out the aggregate of the total of world energy expenditures. And yet, there is value in determining such a total for use in a variety of policy assessments. This working memorandum generates an estimate indicating that in 2018, the global energy bill is on the order of $8.3 trillion (in US 2018 dollars adjusted for purchasing power parities). Assuming energy use increased one percent annually, and the price of energy increases 0.5 percent annually, by 2050 such expenditures may rise to a $13.9 trillion for the cost of total energy services (also in US 2018 dollars PPP).
The conventional means of tracking the nation’s many different uses of energy treats energy as a commodity sold in the market at some price. Yet, if we step back and track energy as work—in effect, understanding how efficiently we use energy to transform matter into the desired mix of goods and services—a different set of insights emerge. This working paper provides a new framework that suggests that both the US and the global economy may be wasting 80 percent or more of the energy used to maintain our social and economic well-being. One big outcome is greater levels of air pollution and the emission of greenhouse gas, but also a weaker economy than might be possible if we used energy and all other resources much more productively.
This paper presents a pioneering benefit assessment framework and indicative quantification of the community and national benefits of operating cost savings from super-efficient room air conditioning (RAC) that are spent locally and not for imported fuel, electricity, and power plants. It also estimates the benefits of expanded employment to replace and service the new RACs and to recover and destroy obsolete and contaminated ozone-depleting and greenhouse gas (GHG) refrigerants.
Shifting spending from foreign to local purchase improves balance of trade, strengthens domestic currency, and creates jobs and prosperity as funds circulate in the local economy. Added to that are the community benefits of mass replacement of RACs and their service to maintain energy efficiency over the life of the appliance. This community impact grows over time as savings accumulate on avoided fuel and energy infrastructure and as the income from the new jobs circulates in the local economy.
With a greater emphasis on energy efficiency, resource productivity, and the scaling up of clean energy resources, the evidence indicates that there will be a net gain in employment opportunities within the global economy. This economic narrative highlights key trends associated with both the global economy and the Middle Eastern and North African (MENA) countries. In particular, it provides an initial framework provided for the World Bank to understand the structure of a prototype employment assessment tool which can evaluate the impacts of investments in greater energy efficiency and renewable energy in MENA countries; and indeed, within any region in the global economy.
The dynamics of recent innovations of Information and Communication Technologies (ICT) and others is better captured by the complex systems theory than traditional innovation systems theory. The analysis based upon complex systems theory leads us to distinct and more positive future prospects and cost-effective policy implications for mitigating global warming. Massive emission cut of greenhouse gas will be possible through the policies that promote innovation and economic development.
Using data published by the U.S. Energy Information Administration, a simple infographic shows that energy efficiency now provides about 63% of the needed energy services to support the American economy. Energy supply provides only 37% of the current needs. As we think about addressing our future social and economic well-being, as well as adopting meaningful climate solutions, productive investments in greater levels of energy efficiency should remain at the forefront of our policies, supported, in turn, by the immediate and greater emphasis on renewable energy technologies.
The basic premise of this paper is the need to change behavior and culture, especially at the organizational level, to achieve the speed and magnitude required to effectively meet the challenge of environmental and economic sustainability. Over the past 40 years, a significant foundation of technological change in energy production and utilization has been achieved through a narrowly framed energy techno-economic decision model. The progress has been adequate to address some market-based geopolitical concerns arising from fossil energy markets. However, continued reliance upon this decision model is wholly inadequate if we are to address both the urgent challenge of global climate change as well as ensure a more robust and sustainable economy over the long run. A current imperative, for example, is to limit global mean temperature rise to 1.5° Celsius before 2050. This will require a significant increase in the rate of investment in efficiency and renewable energy production. But there are additional motivations for changing the model. Energy efficiency and renewable energy strategies are comparatively inexpensive relative to other tested mitigation strategies, the anticipated side effects are relatively well known, and there are substantial new business opportunities to be had. These energy systems are likely to be more robust. Changed energy use patterns are almost always accompanied by reduced waste, job growth, increased productivity, and reduced regulatory requirements. Improved sustainability will be central to the new model, including reduced and highly efficient resource use, improved social equality, and quality of life. To accomplish these ends, the techno-economic model needs the explicit integration of social change principles and methods to achieve the accelerated rate of change. This integration requires understanding individual, and importantly, organizational behaviors, how those behaviors arise and change within organizational contexts, and how evidence-based action frameworks can be applied to increase the probability of achieving and sustaining desired change.
There is neither a law of physics nor economics that prevents us from quadrupling the productive use of energy and other resources. Rather, it is much more an issue of imagination and our political will to get it done.
– John A. “Skip” Laitner