Philip Coggan’s “Long View” column downplays impact of 1973 oil price hikes (“Investors Must Make Call on How Energy Pledges Will Play Out,” August 27).
It wasn’t just about shifting consumers to more fuel-efficient cars. In practice, energy consumption across the economy has changed dramatically. Until then, the basic rule of thumb was that growth in fuel consumption ruthlessly mirrored growth in gross domestic product. But in the half-century since, UK GDP has more than tripled, while overall energy consumption over the same period has actually fallen.
Some of these efficiency improvements have undoubtedly been driven by increases in energy prices. But it was at a time when, in real terms, fuel prices didn’t rise much that we saw the biggest drop in energy consumption.
Between 2005 and 2015, governments of all colors presided over a period in which. according to UK official statistics, final energy consumption has fallen by 16%, electricity consumption by 15.2% and, particularly relevant at this time, natural gas consumption has been reduced by nearly ‘a third.
Why did this happen? In large part because these governments have promoted targeted and effective programs designed specifically to stimulate greater investment in energy efficiency measures. These programs have succeeded in raising minimum standards for many energy-consuming items, from washing machines to homes, from industrial processes to motor vehicles. In the same issue, David Sheppard (Report) lists the options available to the new Prime Minister to combat the huge rise in gas and electricity prices.
He cites energy conservation, as “lower consumption could bring the annual bill below estimates based on typical household usage.” It could indeed. It is then strange that, as Sheppard points out, “so far the government has refused to push energy saving measures, unlike other European countries”.
Chairman, British Energy Efficiency Federation, Cambridge, UK