Energy Efficiency is an economic concept ans is defined as the energy units (in Kilogram equivalent of oil) required to generate a dollar of GDP. India is among the countries which are moderately energy efficient but having low productivity. The ideal case being high productivity and high energy efficiency, no country on the earth is in the ideal category. Even highly productive countries like America and fall in the energy inefficient category. But countries near to the ideal zone are Hong Kong, Switzerland and Austria. These are moderately energy efficient and highly productive countries.
Given the background India has an energy efficiency of 0.16 as of now as compared to 0.17 in 1991. This does not mean that the energy efficiency has decreased since the energy units required to generate 1 dollar GDP have decreased. Now that looks like an achievement. Wrong. Where's the dollar value w.r.t. inflation? Nowhere. The dollar of GDP has a lesser value today than in 1991. The dollar of 1991 was 2.4 times the value of dollar today taking average rate of inflation as 5%. This means India requires approximately 0.36 units of energy if I make a comparative study w.r.t. the year 1991. This makes India a highly energy inefficient country.
Energy efficiency is not a comparative concept but an absolute one. So if some fool tries to explain that look how India is growing as an energy efficient country, tell him that we are more or less still there only. We need a strong Energy Efficiency Policy and a regulatory framework which uses new technology to induce Demand Side Management (DSM) because the negawatt(Negative watt) achieved after using new technologies in industry and homes is far cheaper than the new watt generated at the power plant.
There is another paradox attached to the energy efficiency. Suppose Pappu buys a bike and since Pappu cares for the environment, he bought one with a good mileage. The bike was usually used for running 2 miles a day but since it is energy efficient, Pappu like to drive more thereby using more energy. The confusion surfaces when you confuse the extra consumption with the demand axed. Actually, if the extra mile driven contributes anything to the economy, it does not matter. Conversely, if Pappu is one among those who is driving after girls, he is neither adding anything to economy nor any value to himself, in that case, the efficient technology is making no contribution to the economy even though the perceived fuel use is less. The people who do not understand the difference call it the rebound effect that the extra consumption used by Pappu has rebounded.
Anyway, micro-level use of energy has a combined effect on the economy. And new DSM measures can make a lot of difference.
"Conversely, if Pappu is one among those who is driving after girls, he is neither adding anything to economy nor any value to himself." Really?? Isn't this making Pappu happier? Wouldn't he be less frustrated with life and so more productive at work? I'd say Pappu is a smart guy. He didn't buy his bike because he gave a damn to the environment; he bought it so that he can manage all that roaming around with his pocket money. You see, Pappu can't dance but he sure is good with money.
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