Report

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Energy efficiency stands at a crossroads today. Strong efficiency gains continued to be made in 2016, even as energy prices fell. But at the same time, governments are not coming up with new policies fast enough, relying on existing regulations instead, precisely at the time when a pipeline of new efficiency policies should be coming into force. There is a risk that efficiency gains could take a step back. This issue is all the more important when you consider the impact that efficiency is already having on the global energy system. This year, our report highlights the many ways in which energy efficiency is bolstering energy security, reducing energy spending and helping the environment. Notably, improved energy intensity has been the biggest factor behind the recent flattening of global greenhouse gas emissions. The arguments for stronger action on energy efficiency have never been clearer. The IEA’s Efficiency Policy Progress Index allows a deeper examination of the dynamics of global policy trends. It reveals very different rates of progress across countries and an increasing reliance on pre-existing policies to drive energy efficiency improvement. There was a noticeable slowdown in the implementation of new policies in 2016, and this trend appears to be continuing in 2017. And yet there is plenty of scope for further policy action. Over 68% of the world’s energy use is not covered by efficiency codes or standards. Only four countries regulate the energy efficiency of trucks, a major source of fuel demand as well as emissions growth, and space-cooling demand is rising fastest in countries with the weakest air conditioning efficiency regulation. Technological innovation is creating new opportunities for progress on efficiency. Digitalization is beginning to have a significant impact on the energy sector and energy efficiency is emerging as a key arena for innovation. It is creating exciting new opportunities for integrated solutions where efficiency and renewable energy work together to deliver clean energy outcomes at the lowest cost. As business models adapt to the digital energy world, so too must policy. A key lesson from this report is that well-designed policy works. We are seeing plenty of good examples from all over the world and that is why the IEA is putting more emphasis on best practice policy exchange and helping countries learn from one another to focus on attacking the remaining 68% of global energy use not covered by codes or standards. This is the reasoning behind our new Global Exchange Platform for Energy Efficiency, which I am confident will help people better understand energy efficiency trends and the policies that shape them.

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