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The Environmental and Energy Study Institute (EESI) held a facilitated discussion on how we can make our economy much more energy-efficient, to generate wealth and combat climate change. In 2018, the 329 million residents of the United States spent more than $1.1 trillion to meet their many energy needs. Current projections suggest those expenditures—whether to light and cool homes, power business enterprises, or enable daily commutes—may triple to $3.4 trillion (in nominal dollars) by the year 2050. Shockingly, a huge share of that spending is wasted. As detailed in a variety of recent studies, the U.S. economy may only be 16 percent energy-efficient. In other words, an estimated 84 percent of the energy resources consumed within American communities are wasted.
The inefficient use of energy creates an array of costs and constraints that burden our social and economic well-being. Inefficiency needlessly contributes to the growth of greenhouse gas emissions, adds to the growing burden of air pollution costs, reduces industrial productivity, and complicates our energy security and economic resilience. The inefficient use of energy also erodes the nation’s economic growth, contributing to lower growth in GDP per capita (long-term projections suggest that growth in per capita GDP is falling, from perhaps 2 percent or more from the 1950s to the 1990s, to a projected growth rate of less than 1.5 percent per year over the following three decades).
While there are huge opportunities to promote the more efficient use of energy and other resources, it will take purposeful effort, guided by smart policies and programs, to drive the activities and investments necessary to achieve optimal, large-scale benefits for households and businesses. How can we accelerate the more productive use of energy resources—at sufficient scale—over the next three decades or so? Following an overview of the economic imperative of greater levels of energy productivity, the discussants also examined the magnitude of the policies, program funding and productive investments that will be essential to elevate the performance of the American economy over the long-term.