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Decisionmakers, policy analysts, and the academic community

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A journal article by: Ernst Worrell1, John A. Laitner, Michael Ruth, and Hodayah Finman Abstract: We review the relationship between energy efficiency improvement measures and productivity in industry. We review over 70 industrial case studies from widely available published databases, followed by an analysis of the representation of productivity benefits in energy modeling. We propose a method to include productivity benefits in the economic assessment of the potential for energy efficiency improvement. The case-study review suggests that energy efficiency investments can provide a significant boost to overall productivity within industry. If this relationship holds, the description of energy-efficient technologies as opportunities for larger productivity improvements has significant implications for conventional economic assessments. The paper explores the implications of how this change in perspective might affect the evaluation of energy-efficient technologies for a study of the iron and steel industry in the U.S. It is found that including productivity benefits explicitly in the modeling parameters would double the cost-effective potential for energy efficiency improvement, compared to an analysis excluding those benefits. We provide suggestions for future research for this important area.

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