Energy efficiency opportunities in the residential sector and their feasibility

The objective of this paper is to address the question of what would be the real impact of energy efficiency improvements on the reduction of GHG (greenhouse gas) emissions through the deployment of energy-efficient technologies. We study the cost effectiveness of replacing current appliances with more efficient models, taking into consideration the implicit discount rate observed in people’s purchasing behavior. This is followed by a discussion of why the efficiency gap exists and how large it is. If the world were to successfully implement every negative- or zero-cost measure, the CO2 abatement potential in the global residential and commercial sector in 2020, on a conservative estimate, would be 1.4 Gt of CO2, roughly equivalent to the current CO2 emissions of India as the world fourth largest emitter. If a longer payback period is allowed, a further 1.2 Gt of opportunities, which almost amount to the current CO2 emissions of Japan as the world’s fifth largest emitter of CO2, could be gained globally at below zero-cost in 2020.