Paper Summary and Case Study Assessment

EDITORIAL
How big is the energy efficiency resource?
Amory B Lovins
Rocky Mountain Institute, 22830 Two Rivers Road, Basalt CO 81621, United States of America
E-mail: ablovins@rmi.org
Keywords: increasing returns, efficiency, climate, integrative design, whole systems, expanding returns
Abstract
Most economic theorists assume that energy efficiency—the biggest global provider of energy services—is a
limited and dwindling resourcewhose price- and policy-driven adoptionwill inevitably deplete its potential
and raise its cost. Influenced by that theoretical construct,most traditional analysts and deployers of energy
efficiency see and exploit only amodestfraction of theworthwhile efficiency resource, saving less and paying
more than they should. Yet empirically,modern energy efficiency is, and shows every sign of durably
remaining, an expanding-quantity, declining-cost resource. Its adoption is constrained bymajor but
correctablemarketfailures and increasinglymotivated by positive externalities.Most importantly, in both
newbuild and retrofit applications, its quantity is severalfold larger and its cost lower thanmost in the energy
and climate communities realize. The efficiency resourcefar exceeds the sum of savings by individual
technologies because artfully choosing, combining, sequencing, and timingfewer and simpler technologies
can savemore energy at lower cost than deployingmore andfancier but dis-integrated and randomly timed
technologies. Such‘integrative design’is not yetwidely known or applied, and can seem difficult because it is
simple, but iswell proven, rapidly evolving, and gradually spreading. Yet the same economicmodels that
could not predict the renewable energy revolution also ignore integrative design and hence cannot recognize
most of the efficiency resource or reserves. This analytic gapmakes climate-changemitigation look harder
and costlier than it really is, diverting attention and investment to inferior options.With energy efficiency as
its cornerstone and needing its pace redoubled, climate protection depends critically on seeing and deploying
the entire efficiency resource. This requiresfocusing less on individual technologies than onwhole systems
(buildings,factories, vehicles, and the larger systems embedding them), and replacing theoretical assumptions about efficiency’s diminishing returnswith practitioners’ empirical evidence of expanding returns.