WHY THREE PERCENT THE THREE Global Progress on Energy Efficiency

Demand-side efficiency improvements represent nearly half of the total emissions abatement opportunity to deliver the Paris GHG emission reduction goals, particularly in the near term, while offering wider economic and social benefits. Three percent annual improvement (measured as global energy intensity) represents the opportunity (analysis shows it is achievable through good policies); the necessity (it is the rate required to deliver the Paris goals); and the commitment (to meet Sustainable Development Goal 7).

Efficiency progress has been slowing since 2015, down from almost 3% annual improvement in energy intensity to just 1.3% in 2018, and immediate policy action is required to reverse this worrying trend. Many of the policy and technology solutions are well known, yet only a minority of Nationally Determined Commitments (NDCs) currently contain specific commitments to energy efficiency actions or targets. With growing pressure for stronger action on the Paris goals, revision of NDCs represents a timely and ideal intervention point to strengthen ambition on efficiency through firm policy commitments backed by private-sector and institutional commitments to provide technical and financial support.

Source: Adapted from SDG7 Tracking Report, IEA, UNSD, and World Bank, IEA 2020
Key Message: Due to limited progress since 2011, additional progress is needed with the updated target of 3%.
Between 1990 and 2010, global primary energy intensity fell by an average annual rate of 1.3%. This rate of improvement formed the basis for SDG target 7.3, which aims to double the average annual rate of improvement in global primary energy intensity to 2.6% between 2010 and 2030. The first part of this decade has seen a gradual rise in rates of improvement, with the annual global primary energy intensity improvement rate peaking in 2015 with nearly a 3% improvement. Since 2015, improvement rates declined, with estimates as low as 1.3% for 2018. With additional analysis based on improvement rates through 2016, the IEA estimated the additional progress needed to achieve SDG 7.3, and set a new target of 3%. Unfortunately, with limited progress achieved from 2017 to 2019, this indicates that energy efficiency progress is further off track and to 2030 together we will have to enable improvement rates higher than 3% per year to realize the SDG7.3 energy efficiency goals.