By Rosalinda Sanquiche
As part of the Green Economy series
The Green Transition Scoreboard® (GTS) tracks private sector investments since 2007 in green technologies, including investments in Efficiency and Green Construction. Efficiency in use of energy and materials is basic, often simple to implement and offers the fastest, best bang for investments.
Of the $2 trillion tracked by the GTS, only $282 billion has gone to Efficiency and Green Construction, just over 14 percent, making this huge potential the most challenging to quantify. The McKinsey & Company report, Unlocking Energy Efficiency in the US Economy, estimates efficiency investments can yield $520 billion in returns in the USA alone by 2020. According to The Energy Report: 100% Renewable Energy by 2050 by WWF and ECOFYS, maximum energy efficiency will become central to all economic activity, saving nearly £4 trillion a year through reduced costs by 2050.
PriceWaterhouseCoopers confirms efficiency investments’ rapid payback periods from 12-24 months – compared to renewables payback of 7-10 years. Bloomberg Businessweek reports expected revenues for energy efficiency to expand by 13% annually through 2020.
A flood of reports from 2010 and early 2011 agree efficiency is the critical measure countries can take toward energy independence, supporting business and managing climate change: “Energy Efficiency Plan 2011,” European Commission; “A New Growth Path for Europe,” German Federal Ministry for the Environment; “Sizing the Climate Economy,” HSBC; “Energy Efficiency: The Untapped Business Opportunity,” Carbon Connect; Survey on Economic Recovery and Sustainability, SustainAbility and Globescan.
GTS defines efficiency to include hybrid vehicles and other products requiring less energy to run. Green Construction is defined as built to LEED standards or incorporating multiple green building elements above that of the standard used at the time of original construction. Figures include green engineering and design services; lighting, HVAC and water heating equipment; and materials such as insulation and windows. Since public-sector information is not recorded, the GTS total includes some government buildings – appropriate, given the Low Carbon Construction Innovation and Growth Team, UK Department for Business, advises governments must take leadership to overcome the ubiquitous perception that “only regulation will create demand for energy efficient retrofit.”
Private sector investing is doing an admirable job of driving the transition, despite low government support. The GTS subtracted figures for government buildings, energy generation equipment and energy monitoring services and hardware and still found billions of dollars invested in efficiency.
Greater efficiency leads toward greater employment. Compared to other options for improving energy performance of buildings, the European Commission found implementing low or zero energy/carbon buildings/passive house requirements gave the largest energy and carbon savings and resulted in the largest number of jobs created.
Even the US Department of Defense recognizes benefits of efficiency, establishing a Strategic Sustainability Performance Plan that incorporates improving energy efficiency, acknowledging energy independence as a security issue. Similar plans have been issued from the US White House, Department of Transportation and other government entities, all of which can follow private sector initiatives solidly leading the way.
About Rosalinda Sanquiche
Rosalinda Sanquiche, MA, is Executive Director of Ethical Markets Media and principal author of the Green Transition Scoreboard® Report. Formerly, she worked for the American Wind Energy Association in Washington, DC, and for the North Florida Land Trust. She has written on the construction industry and environment for Builder/Architect and various outlets and has served on the advisory board of the EthicMark® Award for advertising. Rosalinda currently serves as treasurer for the Northeast Florida Green Chamber and is an advisor to Collins Capital Management.
About the Green Transition
"Efficiency: Bedrock of the Green Transition" is part two of five exploring the sectors driving the Green Transition. Stay tuned for Green Transition Talkback posts on Corporate R&D, the Renewables sector and Consumer Demand, contributed by members of the Green Transition Scoreboard® research team. For part one in the series, read Hazel Henderson’s “Good News on the Green Transition.” For more information, please view the associated press release.
Readers: What investments in efficiency has your firm made or is planning to make? Share your experience on Talkback!