Energy Efficiency: Key to Economic Security & Ecological Security
In a continuing series of blogs on climate change in honour of the Bali negotiations, this one looks at energy efficiency. The graph above shows the relative efficiency of economies in terms of energy inputs.
You can see that Canada is the most inefficient economy of the G8. The only economies that are more inefficient than us are Iceland, Kuwait and UAE – the United Arab Eremites – countries we’d never benchmark against.
We consume roughly the same amount of energy per person as the US but produce 20% less GDP for energy input. You can see a similar graph to this at http://www.vjel.org/journal/VJEL10041.html
A Cautionary Tale
In the first oil crisis of 1973, the price of oil quadrupled in 18 months. Japan which is dependent on 100% foreign oil imports, realized the incredible vulnerability of it’s economy – and began the most aggressive energy efficiency program in Japan’s and the world’s history.
The net result was that Japan’s heavy industries – such as petrochemical, cement, pulp and paper and steel – were able to significantly improve their energy efficiency – in some cases by as much as 35%. This was staggering. See graph below:
In the case of the steel industry – which is staggeringly energy intensive – Japanese steel makers by 1987 were 41% more energy efficient than their American counterparts. And the result? 230,000 American steelmakers lost their jobs over the next decade because US steel companies were the most energy inefficient in the world (of the major players) and no longer financially competitive.
So was energy inefficiency an advantage or a huge liability waiting to be exposed as energy prices spiked?
As the most energy inefficient economy among the G8, Canada has a huge opportunity to radically improve the energy efficiency of its' heavy industry. Failing to do so creates a ticking time bomb in terms of inevitable job loss. Becoming the most energy efficient economy globally would create hundreds of thousands of new jobs in Canada and insulate our economy from job loss as the price of oil will inevitably spike because we are entering or have already entered the time of peak oil.
When I was leader of the Green Party (2003-2006) I talked of $75 and $100 oil and some commentators thought that was crazy. But today if I begin talking about $150 a barrel oil and $200 a barrel oil are those same commentators going to laugh today?
In the case of GM, Ford and Chrysler – these companies have actively resisted government regulation (both in Canada and the US) to increase fuel efficiency. If instead they had embraced increased fuel efficiency their sales would not have plummeted as the price of oil has risen dramatically from roughly $10 a barrel in 1999 to almost $100 a barrel today.
So we need to become energy efficient not just for ecological reasons – such as meeting our Kyoto goals -- but for economic reasons.
In other words, dramatically improving energy efficiency (or radically reducing CO2 emissions) is not only the key to economic security but the key to ecological security.
The next blog will focus on why corporations are realizing that “green is green.”
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