Although energy efficiency was already heavily emphasized in the 1970s as a key strategy for energy security, more recently it has also been recognized as one of the most cost-effective strategies for reducing environmentally harmful emissions. Energy efficiency is more than just a resource option such as choosing between coal, oil, or natural gas. It curbs demand rather than increasing supply, and thus provides additional economic value by preserving the resource base and reducing pollution.

For specific applications, we can calculate the ratio of the measure of the goods or services provided to the energy input required. For example, in the transportation sector, energy efficiency is based on miles per gallon for personal vehicles, seat-miles per gallon for mass transit, and ton-miles per gallon for freight transportation.

For the entire economy, with its countless services and inputs, economists usually define the "service...