Cutting Carbon Costs: Learning from Germany's Energy Saving Program (2024)

Energy shortages, unpredictable and high energy prices, waste, pollution, and fears of climate change all drive a sense of urgency in the West about reducing its energy dependence on unreliable sources. Europe imports over half its total energy from volatile producers around the globe. While the United States is able to meet somewhat more of its energy demand from domestic sources, its per capita energy consumption level is twice that of Europe’s.

• The cheapest and most cost-effective path to greater energy security is energy saving, and the biggest, most certain place to do that is in our built environment, which in developed Western countries uses half of all energy and generates half of all greenhouse gases. Most of this energy usage is wasted by leaking out through walls, windows, roofs, floors, doors, and through inefficient equipment.
• All members of the European Union (27 countries) have adopted highly ambitious production targets for renewable energy, and equally ambitious reduction targets for CO₂emissions, down at least 20 percent from 1990 levels.
• Germany is leading the way in developing “green” technologies and has the most ambitious energy-saving program in Europe, aiming for a 30 percent reduction in energy usage by 2020, and a 30-percent renewable energy share, consisting mainly of biomass, wind, and solar.
• Germany’s energy saving program is based on three pillars:
  • A clear legal framework and tight regulation at the national level, requiring energy efficiency upgrades to buildings and increased use of renewable energy sources among electricity providers;
  • Strong financial incentives through subsidies and loans to reduce energy consumption in the built environment at all levels of government (at the national level, these are provided via a public investment bank sponsored by the German government); and
  • Information, promotion, and behavior change, working through regional and local bodies, developing enforceable standards through Energy Performance Certificates, and supporting model projects all over Germany.
• Since 2006, Germany has created nearly half a million new jobs in renewable energy, and over four years, around nearly 900,000 jobs in retrofitting homes and public buildings, such as schools. Green investment, new green technology development, and renewable energy exports are all major growth areas in Europe’s strongest economy. By having taken these steps, Germany remains on track to meet aggressive greenhouse gas reduction targets by 2020 and 2050.
• Germany’s experience—its successes and lessons learned—provide a solid evidence base from which nations like the United States can “leapfrog” Europe, and tackle even more pressing energy and climate change demands through deliberate public and private action.