As our politicians continue to treat energy efficiency as an afterthought rather than a central priority, developing and industrialised countries around the world are seizing energy efficiency opportunities and reaping the rewards.

While some of these nations have implemented energy efficiency strategies to address fuel shortages, energy security or lack of network capacity, many now see that energy efficiency is a cost-effective way to address climate change. The International Energy Agency (IEA) estimates that energy efficiency will account for around 54 per cent of global emission abatement to 2030, in a scenario where global carbon dioxide levels stabilise at 450 parts per million.

Reaping the rewards of energy efficiency

California

California’s citizens use about 40 per cent less electricity than other Americans. This success comes from stringent energy codes and standards for buildings and appliances, and ratepayer-funded energy efficiency programs administered by California’s electric and gas utilities. According to the 2009 California Green Innovation Index, California has prospered since energy efficiency regulations were introduced in the 1970s.

Chile

In recent times, Chile’s economy and energy consumption has grown in parallel by 5 per cent annually. Faced with limited fossil fuel resources and a high dependence on imports to meet its energy needs, the Chilean government prioritised energy efficiency in 2005 and developed a nation-wide program. Sustained energy efficiency action is forecast to reduce business as usual energy demands by 20 per cent by 2020.

Ghana

With blackouts and ongoing power interruptions, Ghana in West Africa distributed six million Compact Fluorescent Lights (CFL) to help cut peak demand by 5 per cent while also reducing electricity bills for its citizens. Ghana’s government also implemented an extensive public education campaign and an energy efficiency standard and labelling program for appliances.

California, Chile and Ghana all have one thing in common: governments that created ambitious policies and environments to support major energy efficiency programs. Aside from addressing energy supply issues, their citizens have benefited from reduced energy bills and their economies have prospered. Australia would do well to learn from other countries and access the growing body of knowledge that demonstrates the benefits of large-scale energy efficiency.

Australia’s untapped energy efficiency opportunity

In Australia, energy consumption continues to increase. Rather than focusing on ways to reconfigure industry to reduce consumption, billions of dollars are spent to prop up old networks and coal-fired power stations. The cost of this is ultimately passed onto consumers through increased electricity bills.

While policies to encourage energy efficiency have been widespread, they regularly rely on markets and incentives to drive investment in this area. Price alone is not a significant driver of energy efficiency take-up.

To increase Australia’s energy efficiency to a level that will result in meaningful emission reductions, state and federal governments can intervene directly through strong policies and regulations to net economic benefit. We can do better with more stringent building codes, targeted information, electricity network regulation, and creating frameworks for parties that currently have no incentive to reduce consumption.

Our governments should consider these options, alongside incentives and other programs, to encourage the large-scale uptake of energy efficiency. The work of the Prime Minister’s Energy Efficiency Task Group offers a promising acknowledgement of this potential. The Group’s brief is to create a step-change improvement in Australia’s energy efficiency by 2020, and place Australia at the forefront of OECD energy efficiency improvement. Based on the achievements of other OECD countries, we have some catching up to do.

Energy efficiency is a proven, simple and cost-effective way to reduce carbon emissions and can be implemented now using existing technologies. It cuts electricity bills, decreases demand on networks during peak periods, and reduces the need for costly network infrastructure. Importantly, energy efficiency buys time for other solutions to be developed and is a fundamental part of any response strategy. Other countries have seen the light – let’s hope Australia doesn’t get left in the dark for much longer.

Mark Lister is the Interim CEO of the Australian Alliance to Save Energy. For more information about A²SE visit www.a2se.org.au