In recent years the topic of energy efficiency and the role it will play in reducing our energy use and carbon dioxide emissions has become increasingly popular.

There is a societal belief that if we make cars, appliances and houses more fuel and energy efficient, then we are doing ‘our part’ to combat climate change.

The challenge is that we really need to focus on reducing the amount of energy we use, and unfortunately, improving energy efficiency does not always lead to energy reduction. This may seem counter-intuitive at first, so let’s look at some interesting statistics.

I found a car advertisement dated Oct. 20th, 1983. It was taken from The Daily Telegraph – a British newspaper – and advertises the ‘new’ Peugeot 205. This vehicle seems rather unremarkable at first – very 80’s – and does little to grab your attention until you start to read. This car was capable of getting 60 MPG (or 3.9 L / 100 km) on the highway, and 43 MPG in the city (5.4 L / 100 km). By today’s standards that is phenomenal. It is on par with today’s best performing hybrids, and far exceeds the fuel economy of most conventional cars available at present.

So what happened? Did we forget how to build fuel-efficient cars? Actually no, we didn’t. In fact, since 1983 we have made huge strides in improving fuel efficiency.

In 2007, the average car being sold in the United States used almost exactly half the amount of fuel per horsepower compared with cars built in 1983. Unfortunately, that same car weighs over 25 per cent more than it did 1983.

We’ve dropped the average 0-100 km/h acceleration time from 14 seconds to less than 10 in the same time period, and most importantly – to make our heavier cars go faster – we’ve more than doubled the horsepower in the average car, from 107 to 223.

So while our scientists and engineers worked hard to make our engines twice as fuel efficient, we also decided to double the size of them. The end result is that our average vehicle today consumes about the same amount of gas it did over 25 years ago.

Unfortunately, this problem isn’t just limited to cars – it applies to our homes as well.

Between 1990 and 2006, the energy used by the average refrigerator sold in Canada dropped by a staggering 50 per cent; dishwashers by an even more impressive 64 per cent; electric stoves by 31 per cent; and the list goes on.

In that same time period, however, total energy use in Canadian households actually increased by five per cent.

Why? Population growth is part of it – but what is more concerning is that we started to build bigger houses (up four per cent), and then started to put fewer people inside each of them (down eight per cent).

It is for these reasons that, despite all the talk we hear about energy efficiency and conservation, the World Energy Outlook still predicts a nine per cent increase in the amount of energy used in North America between 2006 and 2030.

We have an incredible amount of talent in this country and around the world to make massive gains in terms of energy efficiency, but we need to be careful not to negate those gains by always demanding bigger and better. Buying a new energy efficient fridge is a progressive step – but not if you put your old one in the basement to keep your beer cold!

Energy efficiency is important, but it’s critical that it go hand in hand with maintaining or reducing the size and power of the goods we consume so that our total energy consumption begins a downward trend.

So next time you’re out buying a vehicle, ask yourself whether you really need 225 horsepower, or whether 150 (or less) would do just fine.

Conventional wisdom would say that with all the technological breakthroughs that humankind makes on a regular basis, and the rate at which we see technology become obsolete through newer, faster, more efficient devices, that the fuel economy of our vehicles would be constantly improving.

Unfortunately, that’s not really the case. The photo included in this post is from a car advertisement in the UK at the peak of the 1980’s energy crisis. This ad, for a Peugeot 205, claims that it is able to get 72.4 MPG at a steady 90km/h, only dropping to 56 MPG at 120km/h. This isn’t a hybrid. It’s not some fancy prototype. It’s just a run of the mill production car from 1983 that uses less gas than even the most fuel efficient car on the market in Canada in 2008.

The problem is that we haven’t been incentivizing our car manufacturers in North America to produce fuel efficient vehicles. Since we drive pretty much the same vehicles as our neighbors to the south, I’m going to talk about US fuel economy standards, as it is their standards that really drive our fuel efficiency (in fact, Canada currently does not have binding fuel efficiency standards, just voluntary ones).

The Corporate Average Fuel Economy (CAFE) regulations in the US require manufacturers to meet an weighted average fuel economy, or else pay a fine. The weighted average means that if a company sells 10 cars that get 20 MPG, and 5 cars that get 30 MPG, then the weighted average of that car company is:

[(10 x 20) + (5 x 30)]/15 = [200 +150]/15 = 350/15 = 23.3 MPG.

In 2008, that average value had to be equal to, or above 27.5 MPG. For every 0.1MPG below that, the manufacturer must pay $5.50 per vehicle to the government. The problem is that is has been at 27.5 MPG for the last 18 years.

In 1978, the US Government enacted these standards to reduce dependence on foreign oil. In just 7 years, passenger vehicles were required to become 50% more fuel efficient. And guess what? They did. Auto manufacturers were able to meet that challenge because there was a penalty for not doing so. Since 1985, the US has mandated less than a 2% increase in fuel efficiency in passenger vehicles.

The result was that manufacturers didn’t have to focus on fuel economy any more. We made technology breakthroughs, and our cars became better, and even burn less gas per kilogram than before, but they have become heavier, faster, more powerful, and unfortunately no better in terms of gas mileage.

Both Japan and Australia have implemented fuel economy standards that will require vehicles to be almost 30% more efficient than those in North America for 2010. Europe goes even further, with standards in place that will make cars over 50% more fuel efficient my 2012.