How to make a climate and energy bill more practical? Add efficiency!
Posted June 29, 2010 in Solving Global Warming
Having trouble keeping track of all the energy bills flying around in the Senate? Join the club. You have the Kerry and Lieberman American Power Act (APA), Bingaman and Murkowski’s ACELA, the Cantwell and Collins CLEAR Act, and the list goes on.
All those bills have their strengths and weaknesses. ACELA’s fatal flaw is the lack of a carbon cap, while APA and CLEAR are light on the most effective way to lower costs and emissions while creating jobs – energy efficiency in buildings. ACELA has a fairly good efficiency title, but way too much expensive hand holding for dirty energy companies.
Now the most recent entrant into the energy and climate bill mash up comes from Senator Lugar, Republican from Indiana. Much like ACELA, Lugar’s “Practical Energy & Climate Plan” is an energy only approach that punts on the most important issue – cutting carbon by creating a carbon market. There is no question that the long term health of our economy and the global environment depends on a comprehensive approach, but the bill does step out by supporting efficiency policies that have been ignored by the Senate until now. In my own little fantasy world, we could take the best of all of these bills to create something that would really work, but the real world is here in Washington DC and you know how that goes.
For a more thorough review of the entire bill, read David Doniger’s post.
Building energy codes: The building energy codes provision provides for new model codes that will be 30% more efficient than they were in 2004 by 2012 and 50% better in 2015 for homes and 2017 for commercial buildings. It also sets a national Minimum Building Efficiency Standard and directs states to adopt codes that achieve equivalent or greater energy savings than the standard. It adds code adoption and enforcement as a factor for DOE grant funding to encourage states to adopt and enforce compliant codes.
What a novel concept, that we should act like a country for once and have a national energy policy that keeps American homeowners and businesses from being saddled with huge energy bills just so lazy builders can make a few more bucks! And, strong codes make sure that we don’t have to retrofit the buildings that are going up right now to be more efficient (you know, when we finally stop pretending we don’t have a carbon problem) when it is cheaper to build them right the first time. And those same states that complain about having to improve their codes because the feds told them so? Well they shouldn’t be turning around and taking federal money while running up the national energy bill.
The remarkable thing here is that a Republican has just introduced the strongest language on building codes the Senate has ever seen! It’s always extremely gratifying when a politician that claims to care about taxpayers actually thinks about what would help them. Lower energy bills and less carbon emissions certainly do. Money saved on energy gets spent elsewhere in the economy, in sectors that create more jobs and don’t involve mining deaths and ruining the economy of Louisiana. Of course, the bill could do a bit more to make sure that the states actually adopt and enforce the code, but this is a great step towards grabbing the huge efficiency opportunity in new buildings.
Federal building efficiency: The bill requires new Federal buildings designed after 2011 to exceed national building performance standards. It also requires Federal buildings designed after 2019 must achieve to the maximum extent practicable net-zero energy use by 2030. This is very much along the lines of the Executive Order issued by Obama last year. The bill also requires federal agencies to acquire 95% of products that are certified by Energy Star or FEMP which is generally a no brainer. Why waste taxpayer money on inefficient appliances?
Building retrofit program: The bill establishes a residential and commercial retrofit program with target retrofit rates of 5 % and 2%, respectively. It authorizes $2 billion to go towards direct loans, loan guarantees, letters of credit, and other financial product for the deployment of energy efficiency measures.
The bill’s approach is right in that financing could unlock a whole lot of investment in energy efficiency and leverage additional spending, but it is missing a key piece of the retrofit puzzle. Whole home incentives for consumers, like the Gold Star path in Home Star, are also needed to drive demand. What combination of the two will work is open for debate, but hopefully the Senate will hurry up and pass Home Star so we can start finding out.
Rural and industrial efficiency programs: The bill authorizes $755 million for loans to rural consumers for energy efficiency retrofits (Sec. 231) and $500 million annually through 2014 for a revolving loan program for industrial efficiency (Sec. 241).
Appliance efficiency: The bill revises the standard setting rules to add computer monitors, expands the authority of DOE to look at industrial products, and requires the Secretary to set standards for all covered products (as in they will analyze them for standards, not just that they could). All good things that will expand an extremely cost effective program at DOE that has been hitting home runs recently and racking up the energy savings – see lamps and water heaters.
What’s next? So overall the bill is quite strong on efficiency, but it still misses the mark on the single most important policy mechanism for increasing the efficiency of the US economy by not including a cap on carbon. As many have said, the strong sections of this bill should be rolled into a package that will cut our reliance on oil and other fossil fuels while allowing all of use to cast off the weight of the inefficiencies that are dragging our economy down.
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