Energy intensity is a measure of the energy efficiency of a nation’s economy. It is calculated as units of energy per unit of GDP.

This post includes thoughts of Jack Hidary and Nouriel Roubini, and myself and it is based on a conversation we had last night during dinner. It’s about the “low hanging fruit” list of the measures that governments, corporations and citizens can take to reduce emissions and save natural resources: to lower energy intensity of the global economy.

I start with a concrete initiative to illustrate the point. Jack Hidary helped pass a law in NYC that demanded that taxis should be hybrids. The Ford Crown Victoria taxis that were standard for the NYC fleet before that law did 11 MPG. A Toyota Prius gets 48MPG in NYC. Now by adopting hybrids the average consumption of the whole fleet is around 28MPG. Now think of this in scale. Using hybrid cards, will cut average oil consumed per mile traveled in the US cities by half.

Using electric cars: in the US all energy from coal and nuclear plants is buried on the ground at night. Electric cars can charge at night using this energy so going electric could have very little extra cost for society and savings are huge. Challenges with batteries remain, in a Tesla the batteries alone cost more than a Toyota Prius, but their cost is going down rapidly, the transition to electric will happen. Electric cars can also be used to store energy and to re use this energy when it’s needed for something other than transportation. Trucks however be natural gas powered and not electric, that also saves energy and emissions. The transition will be gasoline, to natural gas in some cases but in most gasoline to hybrid to electric for the next 20 years.

The Sharing Economy: Nouriel was fascinated by the impact of the sharing economy and the fact that young people do not have issues with sharing in general. Sharing cars individually a la Uber does not result in less miles travelled (except those saved looking for parking) but results in many less cars being made. As both sharing and pooling becomes more common (Uber just introduced pooling) then we achieve less cars being made and used. Sharing economy companies like Fon make better use of telecom infrastructure, AirBnB of real estate, and there is a long list that overall make better use of existing resources. We now have the first generation who lives worse than their parents in the US, sharing creates a wealth effect that counters the sad reality of declining incomes.

Smartphones Economy: It is very complex to understand if smartphones make societies use less resources and save on energy. Google is the largest consumer of electricity in the US and probably in the world, those servers that do your searches need incredible amounts of power. But at the same time the smartphone economy make us save a lot of energy and resources. One example of many is Google Maps helping us finding shorter and freer routes to our destinations. And the app economy in general that enables a much more efficient use of any imaginable resource. Internet enabled individuals make more informed decisions about almost anything they do or consume.
Another obvious move is to switch to intelligent thermostats like the Nest that distinguish when you are at home and when you aren’t and adjust AC and heating accordingly. Geofencing via apps makes this distinction unnoticeable for the owners.

LEDs are awesome, they give you the same amount of luminescence for 15% of the energy. Lights consume around 20% of the energy of the average home.
Bicycles: bicycles originally made it as a form of interim transport until individuals could afford cars. Well now people have realized that bikes are ideal for distances of 5 miles or less and they save an incredible amount of energy use and resource use. The message to drivers is, that bike that see on the road is not a bike, it’s one less car.

Insulation is important. Sometimes simple improvement in insulation of walls, windows, roofs can reduce energy requirements by 30% or more.

Installing solar panels for electricity is becoming more and more competitive. Still they require a subsidy but in the US the subsidies are there.

Installing solar thermal for hot water, pool heating and to reduce heating bills in sunny places. This is becoming more and more common, especially in the Mediterranean countries of Europe.

Another trend that is making the world more energy efficient is dense urbanization. Although this is counter intuitive to some Manhattan is much more energy efficient than nearby New Jersey or Long Island where everyone lives in their own home with a garden. High rise buildings are more energy efficient than individual homes. People who move around in public transportation and walking are healthier and more energy efficient than people who have to travel long distances from suburbs to urban centers alone in their cars.