International Energy Efficiency Ranking Shows How the US Shortchanges its Economy

A new international energy efficiency ranking by the American Council for an Energy-Efficient Economy places the United States at a lowly 13 out of 16 leading world economies.

There are many reasons to bemoan the finding. The US is throwing away a lot of economic opportunity.

Energy is a basic economic input. Using more, where less suffices, is like paying two workers for a job easily done by one.

“Energy efficiency means using less energy to accomplish the same or better results,” said Rachel Young, ACEEE research analyst and the report’s lead author, during a July 17 news conference. “Using less energy to do more means nations preserve valuable natural resources and can build, transport and grow at a lower cost than countries that waste their energy resources.”

China does better

Despite its iconic images of people wearing masks in polluted cities,  China bested the US. So did India, where the grid functions erratically. In fact, all major economies outperformed the US except for Russia, Brazil and Mexico. Germany topped the list,  followed by Italy, the European Union, China, and France.

“Stagnation and inaction” characterizes the US energy efficiency scene, Young said.

True, the US has improved with appliance standards, government/industry initiatives, and recent fuel economy standards. “However, the overall story is disappointing,” she said

Since the ACEEE’s last international energy efficiency ranking two years ago, the US “has progressed slowly and has made limited improvement,” she said.  “In contrast Germany, China and Canada are pulling ahead.”

It’s odd that the US performed so poorly, given that it is home to innovation centers like Silicon Valley that are developing impressive energy efficiency technologies. Plus, the US has a president who clearly champions energy efficiency more than his predecessors.

So what’s the problem?

Energy efficiency efforts are scattered throughout the US. It is largely a local play, with some states aggressive in their pursuit and others negligent. The federal government could create a focal point for achievement, but Congress has done nothing significant on energy efficiency for a long time.

“We need policy from Congress to help folks back home, help companies back home, get a focus on the benefits of less is more,” said U.S. Congressman Peter Welch of Vermont.

Welch sponsored legislation to create a national energy efficiency target. He also supports stronger national building codes and education for  industry. The US needs more emphasis on energy efficiency in federal transportation planning too, according to Welsh.

“These are all things that are going to make us money,” he said.

Here are some interesting statistics from the report that shed more light on the US’ lowly international energy efficiency ranking.

• The US is one of only two countries with no national energy-savings or greenhouse gas reduction plan.
• Since ACEEE’s last international energy efficiency ranking, R&D in energy efficiency has declined.
• The US uses less combined heat and power (CHP) than many other countries.
• In transportation, the US ranked second to lowest. This is because of its poor fuel economy and the high number of miles traveled per vehicle. The US also has scant mass transit compared with many other major economies.

It’s not all bad news; the US did pretty well in some categories. Even though there is no national mandate, states have imposed stringent building codes. And the US EnergyGuide and Energy Star labels offer best practices to the world market for voluntary appliance and equipment standards.

But how is it possible that China, with its heavily polluted cities, beat the US?

“Pollution and energy are related, but they are not the same thing,” said Steve Nadel, ACEEE’s executive director. “While China has more efficient cars, for example, the US cars are much cleaner. The US has much stronger emissions standards on cars, likewise on fixed sources. Also China uses far more energy from coal.”

Energy efficiency may help China reduce pollution, “but absent cleaning up their power plants and cars a lot more, their air is not going to improve,” Nadel added.

In the US, however, the reverse is true. Efforts to clean up the air, carbon dioxide in particular, could lead to greater energy efficiency. The Environmental Protection Agency in June released a draft proposal to reduce carbon dioxide from existing power plants. Energy efficiency is seen as the least cost way to meet the standard. So if the proposal is finalized as it is now conceived, the US could see a significant boost in energy efficiency projects.

But that won’t happen any time soon. It will be about another year before the EPA plan is finalized. After that the states must file plans to show how they’ll comply. That should take another year. Law suits could also cause delay. So for now, absent action by Congress, the US may continue to ‘spend’ more energy than it needs to get the job done.

Download the ACEEE 2014 International Energy Efficiency Scorecard here.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com.