A set of business actions aimed at reducing the intensity of energy demand could unlock annual savings of at least $2 trillion for the global economy if measures are taken by the end of this decade, a new World Economic Forum (WEF) study has found. These targeted actions can also boost growth and cut greenhouse gas emissions, the study said.
These are the findings of the WEF's Transforming Energy Demand initiative – and a new report – launched in collaboration with PwC and supported by over 120 global CEOs who are members of the International Business Council (IBC), a group representing 3 per cent of global energy use.
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Releasing the report ahead of its Annual Summit in Davos from January 15-19, the WEF said the right policy frameworks would unlock growth and productivity, save companies cash, deliver competitive advantage, and reduce emissions.
In one of the most widely supported initiatives at COP28, governments pledged to triple the world’s renewable energy capacity by 2030 and double the rate of energy efficiency improvement over the same period. The countries need to cut their energy intensity at least twice as fast between 2023 and 2030 as they did in previous years, which calls for substantial changes from the private sector, it said.
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The report highlights practical actions that businesses can take to act on energy demand. "These would be driven by energy-intensity reductions in buildings, industry, and transport," it said, adding that examples include energy-saving measures such as using artificial intelligence to optimise factory line design, energy efficiency, value chain collaboration, industrial clustering to share clean energy initiatives, retrofitting buildings and electrification of transport.
The report further states that "the potential of this demand-side action is extraordinary" and offers a short-term, cost-efficient 31 per cent reduction of demand, shared across all economic sectors. "These gains are deliverable now, at attractive returns, needing no new technology and could avoid the construction of 3,000 extra power stations, according to estimates from the report."
The WEF said that such concerted action would unlock growth and productivity. "At the same time, it would drive the required change in the rate of energy efficiency improvement set by countries at COP28, supporting the world to get back on track to meet the targets set by the Paris Agreement."