Efficiency Standards: Not "All That Sexy," But They Achieve Big Dollar and Carbon Savings

As part of his climate action plan, President Obama yesterday renewed his first-term commitment to efficiency standards with an ambitious, but achievable goal: reducing carbon pollution by a cumulative 3 billion metric tons by 2030 through standards for appliances and federal buildings.

Although as the president, himself, said, “these standards don’t sound all that sexy,” they can prevent a huge amount of carbon pollution. To put how much into context, preventing 3 billion tons would equal the annual emissions of 849 coal plants — greater than the total number in operation in the United States today. Or, as the president noted, preventing that much pollution is “The equivalent of planting 7.6 billion trees and letting them grow for 10 years, all while doing the dishes.”

And thanks to progress made during Obama’s first term, this goal is well within reach: over half of those emissions reductions are already in the pipeline from actions taken during the first few years of his presidency. But it will take a sustained commitment from his Administration, the Office of Management and Budget (OMB), and the Department of Energy (DOE) to achieve the rest.

Why efficiency standards matter

Efficiency standards are important not just because of their environmental and health benefits – reductions in carbon, nitrogen oxide, and mercury pollution – but also because they drive innovation in industry and save Americans money on their energy bills.

This is because appliances and equipment often are purchased without consideration of their long-term costs, such as by a landlord who doesn’t pay the tenant’s energy bill or by a homeowner who wants whatever water heater is on the contractor’s truck because that means a hot shower today. Standards ensure that appliances and equipment meet efficiency levels that are achievable and provide cost savings while continuing to provide the same – or better – services (clean clothes, hot showers, cold beers). A recent study confirms appliance standards have reduced ownership costs over time, while product performance remained the same or improved.

Picking the low-hanging fruit

Despite these many benefits, when Obama took office, DOE was woefully behind on its deadlines to set new and updated efficiency standards, some by more than a decade. In a 2009 memorandum, President Obama urged Secretary of Energy Steven Chu to meet all deadlines going forward.

The president’s clear commitment – combined with Secretary Chu’s leadership, the hard work of DOE staff, and court-ordered deadlines for a long list of products – resulted in new standards that will save Americans a net $77 billion and result in almost 30 quads of cumulative energy savings by 2035, equivalent to about 30 percent of U.S. annual energy use.

Yet there is still more “low-hanging fruit” on the tree: the Appliance Standards Awareness Project estimates an additional  700 million metric tons of savings could be achieved by 2030 through standards set over the next three years. For example, new efficiency requirements for electric motors and commercial rooftop air conditioners have the potential to save enough electricity to power 1.3 million American homes.

Annual Emissions Reductions from Existing and Potential Standards in Equivalent Number of Coal Plants (Source: ASAP Efficiency Boom)

$4 billion in delays -- and counting

Unfortunately, progress has slowed over the last year and a half, with DOE again missing deadlines for several standards, largely due to extended review at the OMB’s Office of Information and Regulatory Affairs (OIRA), which evaluates all federal regulatory branch standards before they become final.  

To date, these delays have resulted in $4 billion in lost consumer savings and 44 million metric tons of unnecessary carbon pollution.

Over the past few months, DOE has begun to make progress to combat these delays with the issuance of overdue rules for distribution transformers and microwave ovens. On Monday, a Senate committee unanimously cleared the nomination of Howard Shelanski to head OIRA, and he and new DOE Secretary Ernie Moniz have vowed to break the logjam. But it will take a sustained commitment from top to bottom to continue this progress and achieve the savings identified in the president’s climate action plan.

Federal buildings also offer big savings potential

While appliance efficiency standards make up a large share of the targeted savings, not to be missed is the president’s commitment to improve efficiency in federal buildings. As the nation’s largest energy consumer and carbon pollution emitter, the U.S. government has a significant opportunity to reduce its energy bills and cut pollution, while setting an example for the private sector. In 2010, President Obama called on the federal government to reduce greenhouse gas emissions by 28 percent by 2020, which could cut emissions by a cumulative 100 million metric tons. Retrofitting existing federal buildings to be more energy efficient and ensuring new ones meet the highest design standards could build on these savings.

So while energy efficiency standards may not be sexy, their health and financial benefits are a win for all, so as the president said: “It is a great deal, and we need to be doing it.”

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