Three Ways to Accelerate Energy Efficiency – RMI

Report on Accelerating Global Energy Efficiency for Sustainable Development

Introduction: Assessing Progress Against Sustainable Development Goal 7

A recent International Energy Agency (IEA) report on energy efficiency reveals a significant disparity between current progress and established global targets, directly impacting the achievement of the Sustainable Development Goals (SDGs). While technological potential for efficiency is high, implementation is lagging, undermining efforts related to SDG 7 (Affordable and Clean Energy), SDG 13 (Climate Action), and SDG 11 (Sustainable Cities and Communities). This report outlines the current status, identifies key leverage points for acceleration, and details the necessary enabling conditions to align global energy systems with the 2030 Agenda for Sustainable Development.

Current State of Global Energy Efficiency

Performance Lagging Behind SDG 7.3 Target

Global progress on energy efficiency is critically off track. In 2023, over 130 nations committed to doubling the rate of efficiency improvements from 2% to 4% annually, a key component of SDG Target 7.3. However, progress has consistently fallen short of this goal. The estimated improvement for the current year is 1.8%, which, despite being a marginal increase, is less than half the required rate. This stagnation has profound consequences:

• The cumulative efficiency gains over the past five years are nearly three times lower than the potential outlined in IEA models.
• Had the world achieved its potential efficiency improvements, the energy savings in 2025 alone would equate to 75 exajoules, an amount comparable to the total primary energy generated by all modern renewables.
• This shortfall directly impedes progress on SDG 13 (Climate Action) by sustaining higher levels of energy consumption and associated greenhouse gas emissions.

Strategic Leverage Points for SDG Acceleration

The IEA report identifies three primary areas where targeted action can catalyze significant progress towards global efficiency and sustainability targets.

1. Aligning Investment with High-Growth Sectors and Regions

A major disconnect exists between where energy demand is growing and where efficiency investments are being made. To advance SDG 9 (Industry, Innovation, and Infrastructure) and support sustainable development in emerging economies, investment must be strategically redirected.

• Industrial Sector: Projected to account for nearly half of all energy demand growth in the next decade, yet it currently receives only 8% of energy efficiency investment.
• Global South: Regions including India, Southeast Asia, Africa, and Latin America are expected to constitute over half of total energy demand growth but collectively receive only 11% of efficiency investment.

Channeling capital into these areas would ensure that new industrial capacity and infrastructure are built to high efficiency standards, locking in long-term benefits for energy security, economic development, and climate resilience.

2. Modernizing Standards to Match Technological Innovation

Policy standards have failed to keep pace with technological advancements, limiting the market penetration of highly efficient products and hindering progress on SDG 12 (Responsible Consumption and Production). While the efficiency of best-in-class products has doubled or tripled in 15 years, standards have improved at a much slower rate. This gap represents a major missed opportunity.

A key example is air conditioning. Adopting standards that reflect the efficiency of the best available technologies could yield massive energy savings. Field tests show that super-efficient air conditioners can reduce energy use by at least 50%, directly contributing to SDG 7 by lowering electricity demand and reducing strain on grids.

3. Expanding Policy Coverage to Untapped Sectors

Significant gaps in mandatory efficiency standards persist across critical sectors, undermining a holistic approach to sustainable development. Closing these policy gaps is essential for achieving multiple SDGs.

1. Lighting: Only two-thirds of global energy demand from lighting is covered by a policy standard, despite proven economic and environmental benefits.
2. Buildings: Just 60% of new buildings are covered by an energy code, a critical failure for advancing SDG 11 (Sustainable Cities and Communities).
3. Cooking Appliances: Less than half the world has efficiency standards for cooking appliances. This directly impacts SDG 3 (Good Health and Well-being), as inefficient cooking is a primary cause of household air pollution and related fatalities.
4. Industrial Motors: Despite accounting for a quarter of total global electricity use, less than half of the world has an efficiency standard for industrial motor systems, impeding progress on SDG 9 (Sustainable Industrialization).

Framework for Implementation and Co-Benefits

Enabling Conditions for a Global Transition

To activate these leverage points, a supportive ecosystem must be established, focusing on three core pillars that align with SDG 8 (Decent Work and Economic Growth) and SDG 17 (Partnerships for the Goals).

• Capacity: Double the number of jobs in the energy efficiency sector through targeted investment in training and skills development.
• Capital: Triple annual global investment in energy efficiency to over $1.8 trillion by 2030.
• Collaboration: Strengthen international partnerships and alliances to accelerate the research, innovation, and deployment of efficiency solutions.

Multiplying the Benefits for Sustainable Development

Accelerating energy efficiency delivers benefits that extend far beyond energy savings. Since 2000, efficiency measures have already helped reduce fossil fuel imports, household energy costs, and emissions by 20% in key regions. Enhanced efficiency is a powerful tool for:

• Economic Prosperity: Saving money for households and businesses, contributing to SDG 1 (No Poverty).
• Energy Security: Reducing reliance on imported fuels and enhancing grid stability.
• Climate Action: Providing one of the fastest and most cost-effective methods for reducing greenhouse gas emissions in line with SDG 13.

By adopting a systems-level approach that integrates efficiency across sectors—from industrial hubs to urban planning—its value can be fully realized, making it an indispensable strategy for achieving the Sustainable Development Goals.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy

  This is the central SDG addressed in the article. The entire text revolves around improving energy efficiency, which is a key component of ensuring access to affordable, reliable, sustainable, and modern energy for all. The article explicitly discusses the global goal to double the rate of energy efficiency improvements.

• SDG 9: Industry, Innovation, and Infrastructure

  The article highlights the industry sector as a major area for energy demand growth and a critical leverage point for efficiency improvements. It points out that industry receives only 8% of energy efficiency investment despite accounting for nearly half of expected energy demand growth. This connects to building resilient infrastructure and retrofitting industries to make them sustainable and resource-efficient.

• SDG 11: Sustainable Cities and Communities

  The article discusses the importance of energy efficiency in buildings and household appliances. It mentions that only “60 percent of new buildings are covered by an energy code” and uses the example of super-efficient air conditioners saving costs for households. This relates directly to making cities and human settlements inclusive, safe, resilient, and sustainable by reducing their environmental impact.

• SDG 12: Responsible Consumption and Production

  The core principle of energy efficiency—achieving the same or better output with less energy input—is directly aligned with SDG 12. The article advocates for standards that match the best available technologies to reduce energy consumption from products like cars, lighting, and air conditioners, promoting sustainable management and efficient use of natural resources.

• SDG 13: Climate Action

  The article frames the need for energy efficiency within the context of global climate goals. It states that stagnation in efficiency has significant consequences and that improvements have helped save “20 percent on… energy-related emissions” since 2000. This directly links energy efficiency efforts to combating climate change and its impacts.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 7.3: By 2030, double the global rate of improvement in energy efficiency.

   This target is explicitly mentioned and is the central theme of the article. The text states that in 2023, “more than 130 countries committed to doubling the rate of global efficiency improvements, from 2 percent in 2022 to 4 percent annually.” The article then analyzes why this goal is not being met, with the current rate at only 1.8%.

2. Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.

   The article identifies the industrial sector as a key leverage point, noting that industrial motors are the “largest contributor to industrial electricity demand.” It calls for increased investment and the adoption of higher efficiency standards for industrial equipment to lock in savings for decades, directly aligning with this target.

3. Target 11.6: By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.

   The discussion on implementing energy codes for new buildings and promoting super-efficient air conditioners to reduce household energy use and peak electricity demand contributes to this target. Furthermore, the article links inefficient cooking appliances to being the “largest contributor to global air pollution deaths,” an issue directly related to the environmental impact of human settlements.

4. Target 13.2: Integrate climate change measures into national policies, strategies and planning.

   The article highlights the global pledge by over 130 countries to double efficiency improvements as a key climate strategy. It also points to the gap between policy progress and technology innovation, advocating for stronger policy standards for appliances, buildings, and vehicles. This represents a direct call to better integrate energy efficiency—a critical climate change measure—into national policies.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Annual rate of energy efficiency improvement: The article explicitly uses this as the primary indicator for Target 7.3. It provides specific figures, such as the goal of “4 percent annually” and the actual estimated improvement of “1.8 percent” for the current year.
2. Investment in energy efficiency: This is a key indicator mentioned for measuring progress. The article quantifies current investment shares, noting it is “just 8 percent for industry and 11 percent for those Global South regions.” It also sets a future goal to “Triple investment for energy efficiency from 2022 to 2030, to more than $1.8 trillion per year globally.”
3. Coverage of mandatory energy performance standards: The article uses the percentage of energy use covered by standards as an indicator of policy implementation. It states that “only two-thirds of energy demand from lighting is covered by a policy standard,” “Only 60 percent of new buildings are covered by an energy code,” and “less than half the world has an efficiency standard for cooking appliances and industrial motors.”
4. Reduction in energy-related emissions: The article implies this is a key outcome indicator of efficiency efforts. It states that since 2000, “efficiency has helped key geographies save 20 percent on… energy-related emissions,” demonstrating a measurable impact on climate action.
5. Number of jobs in the energy efficiency sector: The article suggests this as an enabling indicator. The call to “Double the number of efficiency jobs” positions job growth in this sector as a measure of expanding capacity and commitment to efficiency goals.

Summary of Findings

4. Create a table with three columns titled ‘SDGs, Targets and Indicators’ to present the findings from analyzing the article.

Source: rmi.org