suggest that, if similar measures were employed nationwide, annual energy savings of $20 billion would be realized along with more than $250 billion in net societal benefits—though this would necessitate a four-fold increase in energy efficiency investments, which currently amount to less than $2 billion annually (NAPEE, 2006). Numerous recent reviews have likewise affirmed the centrality of improved energy efficiency in China’s drive towards sustainable development (Sinton et al., 2005; CASS, 2006). Despite its potential, energy efficiency remains underutilized as a way to modify energy demand in the United States (NAPEE, 2006).

This chapter looks at energy intensity and energy efficiency in the United States and China broadly, both on the supply side, particularly in the power sector, and on the demand side. It will provide a more detailed look at some of the most successful energy efficiency efforts.


Figure 5-1 shows the energy demand and GDP per capita for a variety of countries. To a rough level of approximation there is a “universal” relationship between energy and GDP, with the United States as a significant outlier, in that it has a much higher energy consumption per capita. The good news is that, as U.S. GDP has increased over the past 10 years, the energy consumption per capita has remained relatively constant. China, like most of the developing world, is experiencing a growth in energy demand per capita as living standards increase.

Figure 5-2 indicates that energy intensity in the United States has declined since 1985, suggesting that the United States economy as a whole has improved its energy efficiency. However, this does not capture some fundamental shifts, such as the structural change from a manufacturing economy (energy intensive) towards a services economy (less energy intensive), which is not related to energy efficiency per se.2 A newer measure, the intensity index, shown in the chart, was developed in order to account for some of these non-efficiency changes. From 1985 to 2004, it declined from 1 to 0.9, somewhat less rapidly than E/GDP, indicating an underlying improvement of efficiency of 10 percent.

In China’s case, the economy has been shifting from agricultural to industrial, marked by strong GDP growth (Figure 5-3). China’s energy intensity declined markedly from 1980 to 2000, but energy consumption has outpaced GDP growth since 2000. Broadly speaking, China’s energy intensity is presently higher than that of many developed countries, albeit at a relatively low absolute value of energy consumption per capita. Both are rising rapidly, however, which will have implications both domestically and internationally.


The traditional measure of energy intensity (E/GDP) is captured by the line with the most negative slope. The Intensity Index, which attempts to account for structural, behavioral, and weather changes unrelated to efficiency, will be used throughout this chapter since it is a better approximation of changes in energy efficiency. An explanation of this methodology is available at

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