Is the U.S. Economy Getting More Energy Efficient?

April 12, 2013
EIA energy efficient economy

A recent study found that energy efficiency was responsible for meeting 75 percent of the demand for energy services since 1970.

Depending on how you measure it, yes. A recent study from American Council for an Energy Efficient Economy (ACEEE) found that energy efficiency was responsible for meeting 75 percent of the demand for energy services since 1970, while actual supply met only 25 percent.

The Energy Information Administration (EIA) also found that America's gross domestic product has closely followed consumption of electricity. The EIA projects that the electricity consumption required to maintain economic growth will drop.

America's electricity use increased about 5 percent a year from 1950 through the 1970s. In the following two decades, electricity consumption grew only 2 percent annually. Since the early 2000s, the growth has dropped to just 0.9 percent per year.

So is our economy becoming more energy efficient? From an economic standpoint, yes we are using less energy per dollar of GDP.

But that doesn't account for the tons of energy that is still being wasted. In fact, using EIA data, we waste more than half of the energy produced in the U.S.

From the author's standpoint, the U.S. economy is only 14 percent energy-efficient. Skip Laitner, the economist who wrote the ACEEE paper, "believes that measuring the conversion of raw energy into energy services (physical work) is a more appropriate metric for understanding efficiency."

However, the EIA does say that measuring energy intensity per dollar of GDP is a poor way to understand efficiency because energy intensity can rise or fall even if energy efficiency is unchanged. "The energy intensity metric 'disguises rather than illuminates' because it doesn't account for what's happening in each sector of the economy."

Historically, the U.S. is doing more with each unit of energy in the economy, but how quickly that efficiency is improving depends on how it is measured.

Source: Green Tech Media


By Gaylen Davenport

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