It is hardly an exaggeration to say that with increasing affluence, energy has moved into the very centre of public concern. As populations expand and strive for better standards of living, per capita energy consumption rises, leading to an accelerated depletion of finite resources. It is not surprising that those who speak of conservation have been ridiculed for years as impractical and opponents of development. However, in recent years, there seems to be a widespread realization about the limits to energy consumption growth and the need for an efficient utilization of energy. Most importantly, there has been a shift away from thinking about EE and economic prosperity as mutually exclusive policy goals.
This situation, we believe, begins with the understanding of the concept of EE. Energy is not an end in itself, but a means of providing services like illumination, space heating or conveyance. However, much of the information required to deal effectively with these issues is not readily available to end users and decision makers. So, it is true that even at this late date in the history of world energy, policy makers have no comprehensive plan of the design to describe, let alone correct, various dimensions of the energy system.
The concept of energy efficiency varies depending on the person who is defining it. Economists, politicians and sociologists have very different views of EE. Often, the concept of EE is defined either in a technical sense or in a more broad and subjective sense. People with a social view of EE might consider energy savings to be a gain in welfare, while those with a more technical view of efficiency would classify the savings as resources saved. Many a times, the term 'energy efficiency' is used to describe what actually can be termed as energy conservation.
In general, EE describes the relation of an activity or service and the energy used for this purpose.1 The precise definition of EE varies according to its field of application. The different meanings of efficiency in economy, ecology and technology contribute to this diversity. In their taxonomy of efficiency terms, Diekman et al. distinguish nine definitions and areas of application.2 An economic approach to EE, for instance, aims at the optimal resource allocation and minimal overall costs. EE in a more subjective sense may refer to the relative thrift or extravagance with which energy inputs are used to provide services such as powering a vehicle, firing a boiler, cooling an office or lighting a house. EE can be an economic concept—similar to that of productivity, a political concept—the result of EE policy, as well as a sociological concept—reflecting lifestyles of different groups.
Hence, while trying to define EE, there is no single commonly accepted definition. It can be safely argued that an increase in EE is when either energy inputs are reduced for a given level of service or there is an increase or enhancement of services for a given level of input. To be energy efficient
1 The use of energy or an energy-related service is inter-related with a variety of influences: structure of the economy, state of technology, culture and lifestyle, geography, climate, consumer preferences and prices.
2 Diekman et al. 1999, 18. See further Brookes 2000.
per se is to provide services with an energy input that is small relative to a fixed standard or normal input. However, in a narrow sense, EE indicators refer to technology and EE relates to the amount of energy needed to provide a service, which is defined as output of a technical facility or system.3 Investments in EE mean an improvement in the delivery of energy services, for example, in the sense that less energy brings the same end result.
EE is a means to conserve natural resources, reduce environmental degradation, and—not least—to save money. It is true that EE helps to reduce Greenhouse Gas (GHG) emissions. However, there is an intense debate about both its cost effectiveness and the policies that should be pursued to enhance EE.4 Improvements in EE will require active intervention in markets to overcome barriers and to stimulate drivers (see Chapter 6 [this volume] on drivers and barriers). On the other hand some argue that market barriers to the penetration of EE technologies do not represent real market failures that reduce economic efficiency. There are trade-offs between economic efficiency and EE. It is possible to get more of the latter, but sometimes only at the cost of less of the former. Although energy and technology markets certainly are not perfect as all markets in practice, the balance of evidence supports the view that there is less of a 'free lunch' in EE than many have suggested. Nonetheless, a case can be made for the existence of certain inefficiencies in energy technology markets, thus raising the possibility of win-win energy efficiency enhancements.
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