SDG7.3

SDG 7.3 - Energy efficiency

Sustainable Development Goal 7.3 target calls for global progress on energy efficiency by doubling the rate of improvement in energy efficiency globally by 2030.

How SDG 7.3 is measured

Energy intensity, generically defined as the amount of energy used to produce a given output or service, is used as the indicator to track progress on SDG 7.3. The SDG 7.3.1 indicator is specifically measured in terms of primary energy and GDP, which is a proxy indicator to track country or global level progress.

Sector energy efficiency indicators where the output or service is more identifiable, such as tracking progress for energy per floor area of a building or energy per passenger kilometre for road travel, can enable improved decision making.

Is the world on track? 

Global primary energy intensity needs to drop from 5.6 megajoules (MJ) per USD in 2010 to 3.4 by 2030 to achieve the SDG 7.3 target. According to Tracking SDG7: The Energy Progress Report, the global primary energy intensity in 2018 was 4.75 MJ/USD (2017 PPP), after a 1.1 percent global annual improvement. This is well below the annual 2.6 percent initially projected as a prerequisite to reaching the target of SDG 7.3, which now requires an average annual rate of 3 percent every year from 2018 through 2030 to meet the goal. Nonetheless, the 3 percent target remains within reach, provided sufficient and systematic investments are made in cost-effective energy efficiency improvements. 

Relationship between economic growth and the rate of improvement in energy efficiency

This chart shows that not all countries are on the same path when it comes to energy efficiency improvement, however, it does show that there is a trend (yellow line) that if a country has higher economic growth, they are more likely to have a greater rate of energy intensity reduction – the SDG 7.3 indicator for progress on energy efficiency.  

What does a negative rate of improvement mean? If the country has a positive GDP growth, a negative rate of improvement indicates that the primary energy use grew at a faster rate than GDP growth.  If the country has a negative GDP growth, a negative rate of improvement indicates that the primary energy shrunk at a slower pace than the GDP decrease. In both cases, this means that energy efficiency progress is going backwards.   

What is the yellow line showing? The yellow line is the trendline for all countries from 2013 to 2018 with the relationship between energy intensity improvement and GDP growth.  This line does not show what is needed to achieve the SDG 7.3 target, but does show that many countries do need to achieve greater energy intensity improvement when measured by primary energy and GDP.  

 

Benefits of energy efficiency

Access to energy: Energy efficiency can increase the services delivered by each kilowatt of electricity and improve energy access.  

Air quality: Energy efficiency can reduce both indoor and outdoor concentrations of air pollutants.

Asset values: Energy efficiency can increase asset values for homeowners, businesses and utilities.  

Economic benefits: Cost-effective energy efficiency improvements can have positive macroeconomic impacts, boosting economic activity.  

Emissions savings: Energy efficiency reduces GHG emissions, both direct emissions from fossil fuel, and indirect emissions from electricity generation.  

Employment: Energy efficiency can induce job creation, improve productivity and decreases employee absenteeism.  

Energy prices: Energy efficiency can lower energy prices by reducing the need to add new power generation or transmission capacity and by reducing pressure on energy resources.  

Energy savings: Energy efficiency reduces the amount of energy used to provide a service.  

Energy security: Energy efficiency can reduce the reliance on energy imports and reduce the risks of supply interruptions.  

Heath and wellbeing: Energy efficiency supports physical and mental health with healthy temperatures, humidity, noise, and air quality.  

Household savings: Energy efficiency can enable higher disposable income by lowering energy bills and other households costs.  

Productivity: Energy efficiency leads to productivity gains by lowering maintenance issues and optimising processes.  

Public budgets: Energy efficiency delivers financial benefit to public budgets through increased income and decreased expenses.  

Source: Multiple Benefits of Energy Efficiency, IEA