3FOOD

Third Industrial Revolution Consulting Group
Understanding the TIR Innovation Scenario
A working analysis based on data published by the International Energy Agency (IEA) suggests
that Luxembourg may convert less than 20 percent of the available energy into useful work. 399
This is a better rate of conversion than for the United States (14.4 percent), OECD nations (16.2
percent) and for the world as a whole (13.5 percent). Yet that still means the Luxembourg
economy wastes more than 80 percent of the energy consumed in the economic process.
However, the Table 2 data previously referenced suggests that Luxembourg’s energy intensity is
projected to decline at about 3 percent per year through 2050. This is close to twice Europe’s
1.7 percent rate of improvement over the last decade or so. 400 The TIR Innovation Scenario
explores the mix of investments that will accelerate the rate of energy efficiency improvements
to about 4 percent per year.
The TIR Innovation Scenario also advances the movement toward an energy production system
that is anchored by an array of profitable renewable energy technologies. 401 If evaluated
properly, a higher level of energy efficiency investments, together with the development of
cost-effective renewable energy systems, is likely to result in a downward pressure on the total
cost of energy services which, in turn, provides a further net gain for the larger economy.
Table 7 integrates the innovation scenario cost data found in Table 6 and elsewhere. It then lays
out the larger economic benefits that might be expected to emerge with the TIR Innovation
Scenario, especially as business and policy leaders think through which initiatives most usefully
provide the underpinnings of a TIR Master Plan.
399 Here useful work refers to the consumption of energy as it enables the transformation of materials and other
resources into the desired mix of goods and services within the Luxembourg economy.
400 With the global agreement to contend with climate change now taking effect on 4 November 2016 after
support from the European Union, the EU is likely to at least double its rate of energy efficiency improvement
closer to where Luxembourg is already going as a reference case. See http://www.reuters.com/article/usclimatechange-paris-idUSKCN12523G.
401 Given the scant data about the macroeconomic impacts of reducing the cost burden of externalities, as well as
the scant data on the prospective benefits of an increased interoperability among Luxembourg sectors and
structures, the TIR Innovation Scenario necessarily provides only a working assessment of these benefits.
449