A study by the American Council for an Energy-Efficient Economy (ACEE), released in February, found that huge cost reductions and technological innovation have worked together to drive the expansion and diffusion of new information and communications technologies (ICT) without increasing overall energy consumption in the U.S. economy. The path-breaking study, “Information and Communication Technologies: The Power of Productivity,” provides an assessment of the relationship between ICT and energy productivity as well as working estimates of the net energy impact of ICT technologies.

The assessment indicates that for every extra kilowatt-hour of electricity demanded by ICT, the U.S. economy increased its overall energy savings by a factor of about 10.

Data for the past 37 years indicate that the pace of energy efficiency gains has increased significantly since 1996, which was a watershed year in the expansion of ICT in Internet-based and other electronic applications. While U.S. energy intensity declined 1.8% per year between 1970 and 1995, it declined at a much more rapid rate of 2.4% between 1996 and 2006 as a result of the expansion and diffusion of ICT innovations as well as other ICT-related changes in the economy.

Two other key findings of the study:

• It takes less than half the energy to produce a dollar of economic output today as it did in 1970. By the end of 2008, U.S. energy consumption per dollar of economic output will have declined from 18,000 BTU in 1970 to less than 9,000 BTU. These gains in energy efficiency have allowed the U.S. to meet approximately 75% of new demand for energy services via efficiency as opposed to new energy supplies.
• While U.S. economic output has expanded by nearly 65 percent since 1990, the demand for energy and power resources grew by only 23 percent. This decoupling of economic growth and energy consumption is a function of increased energy productivity—in effect, the ability to generate more energy services from each unit of energy consumed.

The study concludes that we have yet to optimize the full range of opportunities for additional gains in energy and economic productivity. For example, the Climate Savers Computing Initiative estimates that today’s standard desktop computers waste nearly half the power delivered to them. For that reason, the industry has committed to a 50 percent reduction in power consumption in computers by 2010. These types of initiatives will improve the energy efficiency of critical appliances and equipment. In addition, the continued expansion of ICT equipment in everyday household and business functions, as well as the substitution of ICT for travel, will provide the means through which additional efficiency gains will emerge. These accomplishments will require a set of smart policies to further catalyze the optimal development of ICT to maximize energy and economic productivity.

Visit the ACEE website to download the full study, Information and Communication Technologies: The Power of Productivity.