Design and Efficiency: Critical Drivers of Low-Carbon Growth

The briefing argues that achieving a 1.5°C future requires substantial reductions in absolute energy use, which can be achieved through incremental gains, technological breakthroughs, and systems-level design. It contends that traditional energy models, which rely on extrapolating past supply, systematically underestimate the potential of efficiency. Using Tesla as a case study, the document demonstrates how integrated design across the supply chain can drastically reduce costs and resource use. It recommends that businesses and policymakers move toward service-oriented models and innovate across supply chains to avoid stranded assets and capture new economic opportunities.

• To align with 1.5°C climate targets, global energy use per capita is projected to need a reduction of 17%–50% by 2050.
• Energy savings on the demand side have a multiplying effect upstream; on average, saving one unit of final energy saves three units of primary energy, which is disproportionately coal.
• Conventional energy and climate models often underestimate the efficiency resource because they rely on historic relationships between economic activity and energy consumption and focus on supply-side economics.
• Efficiency gains are categorized into three types: incremental gains (e.g., better insulation), technological breakthroughs (e.g., hydrogen steel production), and systems-level gains (e.g., a work-from-home economy).
• The IIASA Low Energy Demand (LED) scenario demonstrates that a 1.5°C future is possible and economical through rapid efficiency and renewables without requiring carbon capture or direct air capture technologies.
• Tesla's integrated design approach—including new battery architecture, reduced manufacturing footprints, and direct material sourcing—aims to reduce battery costs by 56% to as low as $55 per kilowatt-hour by 2025.
• Transitioning to service-oriented business models (focusing on the flow of services rather than the sale of goods) can significantly reduce the demand for raw materials and processing.
• Failure to adapt to the energy transition risks creating stranded assets; fossil energy profits in a 1.5°C aligned future could be $100 trillion lower by 2050 compared to a business-as-usual scenario.

APA

Kahsar, R. (2021). Design and Efficiency: Critical Drivers of Low-Carbon Growth. RMI. https://rmi.org/app/uploads/dlm_uploads/2021/03/rmi_design_and_efficiency.pdf

Chicago

Kahsar, Rudy. Design and Efficiency: Critical Drivers of Low-Carbon Growth. RMI, 2021. https://rmi.org/app/uploads/dlm_uploads/2021/03/rmi_design_and_efficiency.pdf.

Wikipedia

{{cite report |last1=Kahsar |first1=Rudy |title=Design and Efficiency: Critical Drivers of Low-Carbon Growth |publisher=RMI |date=February 2021 |url=https://rmi.org/app/uploads/dlm_uploads/2021/03/rmi_design_and_efficiency.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kahsar2021design, author = {Kahsar, Rudy}, title = {{Design and Efficiency: Critical Drivers of Low-Carbon Growth}}, institution = {RMI}, year = {2021}, month = feb, url = {https://rmi.org/app/uploads/dlm_uploads/2021/03/rmi_design_and_efficiency.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }