Energy Efficiency and Economic Recovery: Connecting the Dots
Posted April 15, 2011 in Curbing Pollution, Environmental Justice, Green Enterprise, Living Sustainably, Solving Global Warming, U.S. Law and Policy
In Wednesday’s Washington Post, you can find four articles on energy efficiency policies and economic recovery. But the authors apparently don’t see the big picture, and are missing an opportunity to warn their readers about how our nation’s economic proposals or policies are undercutting our already weak recovery.
The first article is entitled “$4 a gallon gas fuels fears of strained recovery.” The headline tells it all: Economists worry about how excessive costs of gas are reducing consumer spending and sapping economic growth (and going to oil exporters). But the article fails to mention how we could cut these costs—how greater focus on oil savings in transportation and buildings could reduce oil demand and keep prices down.
The next article in the Metro section describes proposed service cuts for the Washington, DC, Metro system. It points out how riders may be inconvenienced by less service, but fails to note that some riders may decide to drive instead of waiting the extra time for their bus or train, and that this will increase gas demand and price just when we need to reduce it. Since these service cuts are happening across the country, the cumulative effect is not small. Too bad the headline couldn’t say “Transit service cuts to strain recovery.”
The third article talks about the need to reduce federal deficits, not so much in the short term but over 10 and 20 years. While this issue entails some political controversy, most economists believe that big cuts in the short term could hold back the recovery but that significant reductions are needed in the long term.
The fourth article talks about how the budget deal reached last week in Congress cuts, among other things, federal investment in high-speed rail and low-income weatherization. But it fails to note that spending money on these services today will reduce the need to spend even more federal dollars in the long term -- exactly what we need to do to solve the problems of encouraging recovery and reducing government spending.
As I describe in Invisible Energy, a dollar invested in high-speed rail in California (where there is a complete business plan all ready) averts the need to spend almost $2.50 in highways in airports in the future, so it cuts the deficit when economists agree that we need it the most. And in the case of weatherization, the government already subsidizes the utility costs of low-income citizens, so a dollar spent this year on reducing utility bills is more than a dollar saved in these future expenditures, not to mention the improved comfort and safety for the occupants of the homes.
The bottom line is we need to connect the dots. These examples show how the nation is not taking advantage of present and future savings opportunities and moving in the wrong direction for the economy, the environment, and for national security. But what is worse is that the decisionmakers, in each of these cases, seem entirely unaware of the damage they are doing.
Comments are closed for this post.
Comments
Isaac Shaffer — Apr 16 2011 09:20 AM
Is this a typical case of not seeing the forest through the trees? I appreciate how frustrating it is to see wise economic policy opportunity slip by but consider the target audience. Our typical American has money enough for some retirement but usually very little and almost no savings. We plan paycheck-to-paycheck so convincing us that some broader spending now will save us money in the future only serves to frustrate us. It takes food out of our mouths now for an uncertain return down the road... a road that will involve much suffering anyway.
And so I submit this: Instead of blind leading the blind or failure to see the larger picture perhaps this is a case of being able to Lead A Horse To Water And Can't Make Them Drink.
Jesse Shaffer — Apr 16 2011 11:31 PM
This reinforces my opinion that we need to restructure our economic strategies on a base, even educational level. The tactic for calculating out economic benefit, risk, and strategies are based on an antiquated model. The model itself lends itself to the most knowledgeable on said model. Those who follow it strictly are susceptible to an learned individual who can use their patterns of action to anticipate their predictions, thus profit off of them. I believe it is because of this that we are in the economic situation we are in.
We need to simply reevaluate. The dollar or any form of currency ( if the dollar was still based on gold it would be an ounce of gold) is only worth the amount of work someone is willing to do to acquire it. In addition to this the value of a dollar when considering trade is additionally factored with the productivity per hour worked.
To simplify, If I am willing to produce something of value, say a chair. If it takes me twenty hours to produce it and you have to pay me twenty dollars an hour, then the chair is worth four hundred dollars. However if I can do it in ten hours for ten dollars an hour, then the chair is worth one hundred dollars. The trade value of the chair to the end purchaser (assuming the same quality) is equal. In this situation the one thing that changes is the value of the dollar.
Tying this back into the article, if we can develop better strategies of living by reducing consumption, thus reducing living cost, we increase the value of the dollar. People can live off of less money, thus the demand will go down, and people will be able to work for less at the same living standard. In the end the value of the dollar will increase. This is also something that is often overlooked when considering tax policy for the larger pool of lower income individuals versus the rich.
That’s just my opinion though.