• Initiative Productivity and Economic Diversification Productivity and Economic Diversification
  • Type Press release
  • Date November 27, 2018

Energy productivity highlighted as a green growth strategy

Research by KAPSARC on energy productivity has been featured at this week’s Sixth Green Growth Knowledge Platform’s (GGKP) Annual Conference/2018 OECD Green Growth and Sustainable Development Forum (GGSD) held at the Organization for Economic Cooperation and Development (OECD) headquarters in Paris.

Energy productivity is a new policy paradigm aligned with green growth, a concept being used by members of the G20. It incorporates specific targets: by 2030 the United States aims to double its energy productivity, Australia aims to increase its energy productivity by 40 percent, and Germany has a target to increase energy productivity by 2.1 percent per annum.

The Kingdom of Saudi Arabia’s energy productivity is around $8,000 of gross domestic product (GDP) for each tonne of oil equivalent consumed and is improving at a rate of around 1 percent per year. This is roughly equivalent to the G20 average, based on 2015 purchasing power parity values. In recent years the Kingdom’s rate of improvement has been below the G20 average, which has ranged from 1.5 to 2.5 percent.

While Saudi Arabia has yet to set an energy productivity or intensity target, KAPSARC research has shown that over 1 million barrels of oil equivalent of domestic energy consumption can be avoided through energy productivity policies. These include energy efficiency and economic diversification. For example, a four percent per annum improvement in energy efficiency could lift GDP growth by over half a percent per year by 2030.

Boosting energy productivity lifts economic growth while helping achieve the United Nations’ Sustainable Development Goals (SDGs) including the Kingdom’s intention to avoid 130 million tonnes of carbon dioxide equivalent by 2030. It is an obvious win-win policy in the transition to a more sustainable growth model less dependent on oil.

The GGKP/GGSD Conference comes as the world prepares for next month’s Conference of the Parties to the United Nations Framework Convention on Climate Change in Katowice, Poland (COP24). KAPSARC is represented at the GGKP/GGSD Conference by Dr. Nicholas Howarth and Mr. Thamir Alshehri, who will present two KAPSARC energy productivity reports: