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issue: February 2009 APPLIANCE Magazine

The Open Door
Energy Efficiency: Our Next and Best Step Forward

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Kateri Callahan, president, Alliance to Save Energy

As current economic woes shed light on America’s propensity for overconsumption, we are seeing a parallel situation in the nation’s energy supply.

Kateri Callahan is president of the Alliance to Save Energy (www.ase.org), an organization that promotes energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security. This article is based on a presentation Callahan delivered at the Danfoss EnVisioneering Symposium, held November 2008 in Carlsbad, CA, U.S.

You could say Americans have overdrawn on their energy account: Representing only about 5% of the world’s population, the United States is the largest energy consumer, accounting for about 25% of the world’s daily energy intake. And, until recently, the nation was the world’s largest contributor of greenhouse gas emissions, spewing more each year just from homes and buildings than the entire economies of Japan and India combined!

U.S. national security is affected by the country’s huge energy appetite. America is already a net importer—spending more than $330 billion per year on crude and refined imported oil, for example. And the situation is growing worse as the country is unable to meet its growing energy needs with domestically produced, environmentally responsible energy.

There is some light in this grim U.S. energy picture, however. We have a clean, cheap, and domestic resource at our disposal: energy efficiency. Although few may realize it, the Alliance to Save Energy estimates that the improvements made in U.S. homes, buildings, appliances, cars, and industry through energy efficiency over the last three decades are now offsetting the need for 50 quadrillion Btu of energy, which is equal to about half of the current annual energy consumption. Energy efficiency has allowed us to avoid the emission of 2.5 billion tons of CO2 annually, and is currently saving American consumers and businesses roughly $400 million a year in avoided energy costs.

And energy efficiency appears to be a “renewable” resource. McKinsey Global Institute estimates that investment in energy efficiency technologies and practices available today could cut global energy demand growth from 2.2 to 0.07%, with negative marginal costs and tremendous reductions in CO2.

But today, this minute, are we prepared to tap into this exceptional resource? What is our next and best step forward?

First, we must address the challenges inherent in harnessing a new kind of primary fuel. Promoting energy efficiency from backseat driver to pilot requires that we overcome the market distortions currently preventing it from assuming the lead. Today’s market pits the home builder—who is looking to maximize profit—against the buyer, who will be the one paying higher energy bills associated with poorly insulated homes and/or energy-guzzling appliances and space conditioning equipment. In addition, utilities that are rewarded for selling more electricity are pitted against rate payers in today’s regulatory environment and have no economic stimulus for deploying energy efficiency. Also, lack of information about the true, life cycle costs of products and equipment often results in purchase of least-cost merchandise up front that “locks in” unnecessary and extra energy use and emissions—often for years and years and years.

Finally, current investment in research, development, and deployment of energy-efficient products and technologies is insufficient to ensure that we will be able to continue progress and truly meet the goals of carbon neutral and/or net-zero energy buildings that have been articulated by policymakers, business leaders, and environmentalists around the world.

Luckily, energy-efficiency champions are emerging in both the public and private sectors. The U.S. federal government—currently the world’s single largest energy consumer—is leading by example, setting goals to reduce its own consumption (35% by 2010) within the framework of the Federal Energy Management Program (FEMP). It is also tackling energy waste across the U.S. economy by enacting two significant energy bills—EPAct 2005 and EISA 2007—which put in place appliance and vehicle efficiency standards; by creating new funding authority for the federal government to invest in energy efficiency R&D; and by establishing energy efficiency tax incentives.

This year, the U.S. Congress enacted legislation that renewed and/ or extended federal consumer, business, and manufacturer tax incentives provided for in EPAct 2005. Through creative programs, it also seeks to address the 32% of national energy consumption for which industry is responsible. The U.S. Department of Energy is aiding large manufacturers to reduce energy use through a federal program called Save Energy Now. At the close of 2008, this popular program has saved American businesses a whopping $863 million in energy savings and avoided 7.4 million metric tons of CO2.

But there are other leaks in the U.S. energy checking account, the biggest being the built environment, which accounts for 70% of electricity consumption and more than 40% of emissions. Unfortunately, U.S. national building codes do little to establish a foundation of energy efficiency in buildings designed to last generations. That’s why, at the Alliance to Save Energy, we work extensively with energy efficiency advocates to campaign for better residential and commercial building energy codes. We are founding members of the Energy Efficiency Codes Coalition, which is pushing for a 30% improvement over the national model (IECC) code. And through our role as a founder and the secretariat of the Building Codes Assistance Project, we encourage state adoption and enforcement of building energy codes that are at least as strong as the most current national model codes.

But what about those homes and offices that already have been built? Our existing stock—which swamps new construction in terms of potential for efficiency improvements—must be addressed if we are to dramatically improve the energy performance of the U.S. built environment. For this reason, the Alliance advocates for continuous update and improvements to appliance efficiency standards and labeling; supports federal funding for weatherization of low-income homes; pursues the development and use of effective labeling for residential and commercial building energy use; and, importantly, promotes consumer education and outreach as well as effective federal initiatives such as the immensely successful Energy Star program.

Notwithstanding the great strides that have been made at the federal level, the need to do more is quite urgent. Only well-funded research and development will inspire the technology and cultivate the environment for energy-efficient products, not to mention the green jobs that will be required to oversee this expanding market. And it is time the U.S. federal government put to use funds earmarked for energy efficiency initiatives, such as the Zero-Net Energy Commercial Building Initiative (CBI) authorized in Energy Independence & Security Act (EISA), of which the alliance is a primary advocate. The return on investment for projects such as CBI—thousands of jobs created, millions of dollars saved—is too great to ignore.


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