Energy Efficiency Policy: a Policy for Security of Supply, Competitiveness and Sustainability

Opening remarks by Ambassador Gardner

EU Sustainable Energy Week, Charlemagne Building
Brussels, Belgium, June 24, 2014

I’m very pleased to have the opportunity to provide opening remarks along with my EU colleagues today on the issue of energy efficiency.

Compared to many other topics I speak on as the U.S. Ambassador to the EU, this is an easy topic to discuss and promote, because everyone agrees that energy savings and improving energy productivity is a good thing.

There may be disagreements over specific policies, but the goal is not controversial.  Regardless of whether you are focused on lower electricity and fuel costs, renewables adoption, energy security, economic development, or emissions reduction, energy efficiency is part of the solution.

As U.S. Environment Protection Agency Administrator Gina McCarthy remarked in her speech at the U.S. Energy Association’s Energy Efficiency Forum earlier this month (June 14) that even in Washington D.C., where people love to argue about everything, no one argues that energy efficiency is the lowest-cost, highest-reward solution to many of our objectives.

In the climate and energy sector, energy efficiency stands out as an initiative that everyone can agree on.

It’s also something everyone can take action on.  Governments, policy makers, companies, and individuals can all take steps to use energy more responsibly and efficiently.

And yet, with all the agreement and recognition of its importance, energy efficiency is something that has to be constantly emphasized and promoted.

Why?  Because improving energy productivity is boring.  Yes, policy makers, companies, and individuals can all take action, but as many have pointed out, this action is rarely exciting.  Unlike with other clean technology initiatives, there’s no opportunity for a politician to stand in front of an impressive wind farm or huge solar array; no “Formula E” electric racecar championship to watch.

Instead, energy efficiency is making small, uninteresting changes like constructing a well-insulated building, replacing a washing machine, or buying a light bulb that require less electricity.

The benefits from taking these kinds of actions are often spread over time, while the cost is upfront.  In other cases, both the costs and benefits are so low they lead to inaction.

I know that our moderator, Marie Donnelly, perfectly illustrated the essence of this problem at a May 5 conference on EU energy security strategy.  She asked her audience to remove their suit jackets so that the air conditioning could be turned down just a bit.  Some complied and felt silly, and others did not even bother to go along with the suggestion—but these are the small and tiresome solutions that add up to big energy savings.

Philippe Benoit, the International Energy Agency’s head of energy efficiency, talked earlier this year about efficiency being often perceived as a “low-hanging fruit,” but the difficulty in promoting it makes it more like “a big watermelon” that’s hard to lift.

The “big watermelon” of energy efficiency is not going to get smaller.  There have been, and continue to be many valiant efforts to make energy savings more exciting, but the underlying problems I just described are not going to change.

However, what we do have right now, is the possibility of more hands to help lift the watermelon.  I want to highlight two factors that have opened a window of opportunity to push for greater action right now.

The first is energy security.  Recent events in Ukraine have emphasized the need for Europe to pursue all possible means of diversifying its energy sources, which includes finding ways to increase energy productivity.

We have a shared historical precedent here.  The 1973 OPEC embargo of oil supplies to the United States and several members of the European Economic Community prompted some of our earliest actions to conserve.  The crisis exposed our vulnerability to global energy supplies and uncertain prices, and affected businesses and individuals alike.

Looking over some of the energy savings campaigns that were initiated in the U.S. in the 1970s, I am amazed by the creativity of many of the strategies for energy savings, and the public tolerance for many of the policies which affected people’s daily lives.

For example, year-round daylight saving time was implemented from January 1974 through February 1975 to reduce electric light and heating use.  Also in 1974, a national maximum speed limit of 55 mph (about 88 km/h) was imposed through the Emergency Highway Energy Conservation Act.

The crisis also prompted a call for individuals and businesses to conserve energy in the smallest of ways.  Many newspapers carried full-page advertisements with cut-outs which could be attached to light switches, reading “Last Out, Lights Out” or “Don’t Be Fuelish”.

In the United States, many of these policies faded away after prices stabilized.  But the lasting benefit of these actions and the policies that followed over the years is notable.  U.S. oil use prior to the embargo had been increasing and was projected to continue increasing indefinitely.  Two decades after the oil crisis, we had almost doubled vehicle fuel efficiency, and cut home heating oil usage in half.  A 2012 report by the Alliance to Save Energy estimated that without the numerous energy efficiency improvements made since 1973, the U.S. would require about 50 percent more energy to deliver our current GDP.

Right now in the U.S. we are seeing a resurgence of attention to energy savings and productivity, prompted by concerns about climate change.

In the 2013 State of the Union address, President Obama laid out the goal of doubling America’s energy productivity by 2030 from 2011.  Energy Secretary Ernest Moniz reiterated this sentiment in his first public speech in May 2013, only a few hours after being sworn in, saying he would make energy efficiency a focal point during his tenure as Secretary of Energy.

President Obama’s Climate Action Plan, and the new proposed rules for cutting emissions from power plants, will further drive action on energy efficiency in the power sector.

This brings me to the second factor that is creating a window of opportunity for action on energy efficiency right now:

International focus on climate action, and particularly the desire to reach an international agreement applicable to all parties in 2015, is driving the U.S. and other countries to transform energy use.  This common goal is creating an opportunity for greater cooperation on research and energy savings policies.

At the U.S.-EU Energy Council in April of this year, we publicly committed to further cooperation on the transition to competitive, safe and sustainable low carbon energy systems, notably through further development and deployment of renewable energies, energy efficiency, and deployment of carbon capture storage and utilization.  The Council noted that continued innovation and investment in these areas will bring benefits in terms of energy cost savings and jobs, and contribute to the fight against climate change.

This sentiment was echoed at the EU-U.S. Summit, where it was emphasized in our joint statement that we remain committed to close cooperation on energy research and innovation, including energy efficiency, and smart and resilient energy grids and storage.

For example, the EPA-EU ENERGY STAR Agreement which has been in place since 2001, promotes use of a common voluntary label and a consistent set of performance standards for office equipment in the United States and the European Union.  This common approach will increase the global supply of and demand for energy-efficient office equipment. It also will help manufacturers avoid the burden of complying with multiple labeling programs.

Most recently, at the G7 Energy Ministerial which took place in Rome May 5-6, the energy leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Commission agreed that efficiency needs to be further addressed by proactive policies in industry, in all kinds of power generation, transport, and the building and household sectors.

Through cooperation we will deploy energy efficient technologies and develop needed capabilities, including financial capabilities.

In closing, I want to emphasize that both the U.S. and the EU have a window of opportunity right now to promote policies and initiatives that increase the productivity of energy use, and we have an opportunity to do it collaboratively.

We already know and agree that energy efficiency is important, and right now political, economic, and environmental concerns are providing an even greater motivation for action.

We can do this at the international level, through our participation is organizations like the Clean Energy Ministerial, the Sustainable Energy for All initiative, and the International Partnership for Energy Efficiency Cooperation.

We can also promote energy efficiency through research cooperation under our Science and Technology Cooperation Agreement.  And we can encourage the sharing of best practices on energy efficiency, as we have done through the EU-US Energy Star Agreement.

The important thing is that we use this opportunity to take action.

Thank you.