The Potential for Reducing Carbon Emissions Through Improved Efficiency in Industrial Processes

Abstract

The potential for reducing carbon emissions through efficiency improvement in industrial processes is large in terms of technical capabilities. Simple cost-effectiveness considerations suggest that much can and should be accomplished even with present technology at present energy prices, and that much more should be accomplished with moderate energy, or carbon, taxes. Moreover, with new products and increasing affluence, the composition of production is changing such that industrial energy and materials consumption are growing more slowly than the economy. In addition, technological progress tends to reduce the overall energy and materials requirements for each industrial process. This relatively rosy scenario faces serious difficulties, however: industrial decision makers strongly discount future expenditures for energy for a variety of reasons. In addition, many slow-growing heavy industries may not have the capital and technical capabilities to invest in the best new production processes. For these reasons it is important to develop public policies to encourage the development and dissemination of more-efficient process technologies, and to assist energy-intensive industries to modernize, for example through utility demand-side management progams.