The energy transition can reduce losses by USD 4.6 bn

Moving to clean energy could bring savings of up to USD 4.6 tn each year on the back of reduced energy use during the fossil fuel production process, Bloomberg reported, citing research from Colorado-based think tank RMI. One third of the energy the world produces goes into mining, refining, and transporting fossil fuels, while another third is lost as these fuels are burned in inefficient machines. As a result, the production and transportation of solar panels and wind turbines have a much smaller carbon footprint than fossil fuels.

EVs and heat pumps spell big savings: A combustion engine only converts a quarter of gasoline energy into motion, while an electric car converts more than three quarters of the energy. “While burning one unit of natural gas in a boiler generates one unit of heat, an electric heat pump uses one unit of electricity to provide three units of heat,” Bloomberg writes.

But efficiency has been left behind in the climate fight: “Most of the discussion on energy security is to secure supplies of energy, but there is very little acknowledgement that reducing demand for energy also helps with energy security.” RMI researcher Daan Walter told Bloomberg. Over the past decades, the global economy’s energy efficiency has been increasing by 1-2% each year, while global economic growth stays at 3%, meaning that the rate of increased efficiency is not enough to counteract the total amount of energy the world uses.