Energy Efficiency and Economic Recovery: Connecting the Dots

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.