Fallacies of energy efficiency indicators: Recognizing the complexity of the metabolic pattern of the economy

In this new publication, MAGIC researchers Raúl Velasco, Tessa Dunlop and Mario Giampietro take a critical look at the use of energy efficiency indicators in energy policy. They point out that the strategy of energy efficiency to save energy is deceptively simple: the idea is to use less input for the highest amount of useful output. However, on a practical and conceptual level, efficiency is an ambiguous and problematic concept to implement. Of particular concern is the lack of contextual and qualitative information provided in energy efficiency measurements based on simple ratios. Oversimplification of efficiency measurements can have a detrimental effect on the choice of energy policies. Efficiency measurements are particularly problematic on a macroeconomic scale where a significant amount of meaningful information is lost through the aggregation of data into a simple ratio (economic energy intensity).

The authors first present practical examples flagging conceptual problems with energy efficiency indicators, and then illustrate an alternative accounting method—the end-use matrix—based on the concept of the metabolic pattern of social-ecological systems to show the possibility of enriching efficiency indicators by adding qualitative and contextual information across multiple scales and dimensions. The proposed method unpacks and structures salient energy input and output information in a meaningful and transparent way by generating a rich multi-level and multi-dimensional information space.

To find out more, read the full paper in Energy Policy (open access) here. To learn more about MAGIC’s research on energy policy, check out our project website: https://magic-nexus.eu/policy-case-studies.

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