Why Energy Efficiency is the Cheapest Form of Energy
For a subject that more often than not draws blank stares at dinner parties, energy efficiency has an uncanny ability to provoke controversy among analysts and policy makers alike.
The latest study to dispute its benefits has once again ignited a debate between those who question the value of federal and state subsidies for efficiency programs, which they argue, have questionable returns. Leaving aside the highly technical debate over modeling efficiency – and the more personal friction between engineers and economists – the policy implications are significant.
Energy efficiency is widely considered the most important energy source today, with positive effects ranging from lower energy costs, to boosting the local economy, to improved health outcomes and social wellbeing. Nowhere is this more true than in the state of California.
The controversial paper, published in June, posits that the costs of implementing the U.S. Weatherization Assistance Program outweigh the benefits in terms of efficiency savings. The findings have been disputed by the Natural Resources Defense Council and Illinois Institute of Technology, among others.
More broadly, however, it once again brings into question the value and purpose of energy efficiency programs in the United States. In California, the state that has arguably had the most success with increasing energy efficiency, the debate continues. Since 1975, California’s energy use has essentially plateaued, while consumption per capita in the rest of the United States has almost doubled. It is widely accepted that California’s energy efficiency programs are at least partly responsible.
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Opponents dispute the extent to which the benefits can be attributed to green policies and programs that have spanned everything from fuel efficiency standards, to appliance ratings, to weatherization, to simply better communicating the importance of energy savings to Californians. In a 2008study, Stanford economists found that only 23% of the difference between California’s energy use and the U.S. as a whole was attributable to policy. Still, if this is to be considered the lower end of the range, it remains a significant figure.
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