Energy efficiency can define new economics of climate action

THE GLOBAL ECONOMY stands at an inflection point.The most understated factor that can affect its trajectory is climate change action.

- DEEPAK SHARMA

Over the past 50 years, the number and intensity of climate-related disasters have multiplied several times over. Developing economies are disproportionately affected, facing physical damage and deep losses in productivity and social stability. The mounting evidence has made one truth unignorable: efficiency — in how we use resources, manage energy, and design systems — is a primary defense.

Energy transition

Energy efficiency is not merely a technical measure but an economic flywheel. Each kilowatt-hour conserved at the point of use prevents more than one kilowatt-hour from being generated, considering transmission and conversion losses. Efficiency creates both environmental and financial leverage, reducing the need for additional infrastructure while freeing capital for innovation and clean growth.

Not surprisingly, then, the International Energy Agency calls efficiency the ‘first fuel’ of the energy transition; it provides the lowest-cost pathway to decarbonization while enhancing energy security.

What makes energy efficiency so transformative is its ability to connect otherwise fragmented efforts — linking digitalisation, electrification, and decarbonization into one cohesive system. Digital technologies are turning energy into a measurable and controllable factor.

With sensors and analytics, companies gain real-time visibility over energy flows, asset performance, and process losses. When information becomes intelligence, optimisation follows. In advanced manufacturing, digital energy management has cut energy intensity by up to 40% while improving reliability and product quality.

The cost savings can be reinvested into deeper climate action — whether that means renewable integration, clean mobility, or process innovation. This is the essence of the flywheel effect: one gain accelerates the next.