Invisible Energy: How Can We Get Political and Opinion Leaders to Recognize the Key Role of Energy Efficiency
Posted February 10, 2009 in Curbing Pollution, Moving Beyond Oil, Solving Global Warming, U.S. Law and Policy
All of the debate this week in Congress regarding the stimulus bill seems to be over its size and whether it focuses on government spending or private investment. Completely absent is discussion about the root causes of the crisis and how the stimulus would address those fundamental problems.
Particularly astonishing was the recent vote to establish a tax credit for buyers of new homes.
While a tax credit could superficially be seen to help stimulate more housing production and sales, more careful analysis shows that this is just adding to the nation's problems rather than solving them.
The most direct cause of the recession is that prospective homeowners borrowed money that they couldn't repay, perhaps ensnared by lending policies that offered the ability to buy a house to people who otherwise couldn't afford it.
But this is exactly what a tax credit does. Especially since the main costs of owning and operating a house-the cost of driving to and from it and of paying the utilities-still are not considered when originating loans. (As I previously noted, for a typical house lost in suburban sprawl, the median loan is below $175,000 but the average 30-year commitment to utility costs to run the home is $75,000 and the cost to drive to and from is $300,000.)
So the tax credit will perhaps help solve one problem-reducing the inventory of unsold homes-while actually worsening a bigger one: the toxic debt of mortgages that may default.
If we want to stimulate new housing, we should condition it on good energy efficiency and location efficiency. Senator Snowe recognized this in her amendment to the Economic Recovery bill that would offer a $5000 tax credit for building a new home but condition it on achieving a 50 percent reduction in utility bills. The reduction is measured by a home energy rating performed after the house is constructed.
Working with a broad group of nonprofits and business organizations, NRDC has developed a set of programs aimed directly at addressing all of the root causes of the recession through improving energy efficiency in a way that creates lots of jobs quickly but also develops a sustainable program of stimulating spending and provides a way to pay back all the costs through energy savings.
Unlike the tax credit for purchasing a new home, which may alleviate one cause of the recession but only at the expense of exacerbating another, energy efficiency policy helps relieve ALL the causes of the recession.
These issues will be discussed in detail in my forthcoming book from Bay Tree Publishing called Invisible Energy.
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Comments
joe symons — Feb 10 2009 08:05 PM
I enclose below a comment received from a friend regarding your piece "Extreme Efficiency" which was noted as a footnote to the recently released EAC "Keeping the Lights on in a new world" report, page 33. I found the report somewhere (not at the ACEEE site) and sent it on to some friends. I found your comments consistent with my views; i appreciated the care with which you deconstructed the problem. With this background, I received the following comment:
"The NRDC assessment is rational in the same sense that establishing
thermodynamic limits is rational. It's good to know theoretical
possibilities, and conservation is inherently desirable (the Jevons
Paradox notwithstanding).
I would, however, be more optimistic if I could shed the sensation that
the report (a) rests on at least one false premise and (b) largely ignores
a critical element in the conservation picture.
As stated in the report's abstract, the NRDC assumes that "the goal of
policymakers is to meet aggressive climate change emissions reduction
goals." It seems self-evident to me that this is not the case.
The obvious goal of policymakers is to offer rhetoric and token gestures
that will placate a gullible public that is unwilling or unable to
contemplate any fundamental change in living arrangements -- housing,
transportation, or anything else. Elected officials, civil servants,
journalists, business "leaders", and academics are devoted entirely to
promoting a dazzling variety of fictions about technological fixes for our
problems. The right biodiesel feedstock, the right rare-earth mineral PV
substrate, the right hydrogen fuel cell, the right something-or-other will
usher in a magical world of harmless energy in infinite supply forever.
Ain't gonna happen. I could be wrong. But I don't think so.
Hence, I tend to discount any and all predictions that require intelligent
public policies. Almost everything public officials touch is made worse.
They are guaranteed to do the wrong things. Granted, not always the worst
possible things, but certainly the wrong things.
Moreover, I think it's absurd to apply something like Moore's Law to
energy conservation. Gate count in semiconductors can, we know, grow
exponentially for a long, long time. Energy savings is inherently more of
a diminishing-returns phenomenon. You do the easy, big-payoff stuff
first, and each additional increment of savings is won at greater effort
and cost. Won't take long to be in a realm where massive effort and
expense will be needed to squeeze tiny improvements out of our systems.
That assumes, of course, a lifestyle more or less as we have it now. We
could surely reduce our consumption-, energy-, and CO2 footprints
dramatically if, say, we all lived in unheated mud huts, wearing fur suits
throughout the winter. By contrast, I am confident that the high-tech
alternative, in which we somehow live as we do now but with 90% less
energy, is a fantasy. It just feeds a collective denial that disturbing
changes are already in the pipeline, that we are in fact a lot poorer than
we think we are, and that living standards are going to fall, no matter
what Obama, Geithner, Bernanke, and Pelosi do or don't do. The levers of
power aren't connected to anything useful any more. They can make things
worse, but they can't make things any better.
Energy conservation can plainly help at an individual level. It is even
possible that community-level programs could achieve something worthwhile.
I cannot, however, imagine any circumstance that would produce net
positives at the national or state level.
One of the issues disregarded in the NRDC report is the energy "embedded"
in energy-saving products or structures. It's the same problem that
carmakers and (honest) tree-huggers face. If your main goal is to save
energy and emissions in your car purchase, you should buy a ten-year-old
Toyota Corolla, not a Prius. The energy embedded in the fabrication of
the beater is all sunk cost, whereas a new Prius has to support all-new
mining, processing, shipping, manufacturing, integration, delivery, and so
on. It's a no-brainer. The Corolla will save more energy overall than
the Prius will. For most of us, the Prius is more about displaying green
credentials than about saving resources. When we run out of ten-year-old
beaters, maybe we can start to phase in greener vehicles. Maybe.
Same reasoning applies to buildings. Yes, we can do a lot to save energy.
I would, for example, love to experiment with a completely passive-solar
home on the Mount Baker Road property. But a great deal of energy is
invested in the materials and assembly processes, so it becomes a study in
energy "invested" up-front versus the recurring annual savings. The NRDC
seems to think that a 1% savings is always worthwhile. And I guess it is,
if you don't count the costs required to achieve that 1%.
In short, I'm skeptical. I could stare at the details and the numbers
some more, but my initial scan tells me that we're touting our plans for a
marvelous new snowman while standing directly in the path of an avalanche."
I've been pestered for months about whether we (or really, whether I) really have wrapped my arms around the status of America as it lumbers forward into the 21st century. I don't know whether to imagine a "collapse" scenario (Diamond) or a Roddenberry scenario or some middle way which, realistically, will result in a significant lifestyle downgrade. I'm thinking about my grandchildren and wondering what my best options for their preparation should be. Your thoughts most welcome. Joe
David B. Goldstein — Feb 11 2009 12:41 PM
Commenter Symons raises a number of interesting points, most of which require lots of thought to respond to: much more than can be addressed in a blog.
They are addressed at the appropriate length in my two books: in Saving Energy Growing Jobs and in my forthcoming book from Bay Tree Publishing called Invisible Energy.
The first point is about whether political leaders really care about climate. It is critical to distinguish between what could happen if we as a nation try to do it and what will happen. My blogs are about what could happen. Predicting the future is a fool’s errand.
Maybe the last eight years of incompetent public policies have made some people cynical, but if you remember the 1960s and the progress we made on civil rights -- a much more difficult issue socially and politically -- you would be more optimistic.
If saving 90% is a high tech fantasy, why am I already doing it (saving 85% of electricity on the meter without sacrifice) in my home?
Economic theory suggests diminishing returns but economic data on efficiency fail to show that: the low hanging fruit of efficiency keeps growing back whenever we pluck it. This is the difference between a static view of the economy and a dynamic one. The key insight of Moore’s law is that the economy can be dynamic.
Embodied energy is a blind alley at present. It was analyzed extensively in the 70s where the research showed to good approximation that the embodied energy per dollar of just about anything is 10% of the energy value per dollar of energy itself. Thus any efficiency measure that pays for itself in dollars pays for itself in energy 10 times faster. When we are down to 10-20% energy use compared to now, we will have to worry about embodied energy. We should start systems for gathering data on the energy cost of Priuses, SUVs, housing options, etc, but we don’t have enough information to act on them rationally now.
If America has yet to accept how far our standard of living will decline, it is in large part because we have failed to recognize the importance of efficiency. Getting efficiency front and center can mitigate or even reverse the decline.