Why is the GOP Fighting a $1 Trillion Savings Plan?

Federal energy efficiency standards have saved consumers and businesses billions of dollars over the past 30 years, and are on track to save $1.8 trillion by 2035. The savings are increasing practically by the month as the Department of Energy keeps issuing new cost-saving standards.

Returns like this aren't easy to find in the stock market (especially lately). Lawmakers would be hard-pressed to find a more innovative, cost-effective, bipartisan example of good governance than federal energy efficiency standards. Yet these highly successful, money-saving measures are being sideswiped by recent hardline Republican attempts to take down any sort of standards, whether they govern the air we breathe, the water we drink, or how much energy a ceiling fan can use. They claim standards are bad for business--when in fact, federal standards have a history not only of protecting consumers but benefiting businesses as well, as I joined Jason Knopes from the American National Standards Institute in pointing out in an op-ed published on The Hill political website last week.

Before the first energy efficiency standards for refrigerators were put in place in California in 1976 in response to legislation signed by then-Governor Ronald Reagan, the fridge was the biggest energy hog in the home. Unbeknownst to consumers, fridges could eat up as much as half of a home's electricity. Buyers were in the dark about operational costs, and manufacturers had no incentive to make refrigerators more efficient, as they weren't the ones paying the bills. It's a classic example of the market not taking care of itself.

When refrigerator standards were first proposed, industry lobbyists howled that they would lead to food rotting in grocery store aisles, lukewarm beer, and the collapse of the refrigeration industry.

But nothing of the sort happened. Standards sparked innovation that made fridges better than ever. Today, refrigerators hold more food, take up less space, and use some 80 percent less energy than they did in the 1970s. They do it all for about half the price, and without using ozone-damaging refrigerants, either. And refrigerator production continued to be profitable to the manufacturers whose innovation met and even bettered the standards.

Refrigerator standards are just one of dozens of money-saving federal energy efficiency standards for appliances and equipment that have been put into place over the past three decades. In addition to saving a net cumulative total of $1.8 trillion by 2035, these standards will also cut electricity use nationwide by 14 percent. That's a triple win, for businesses, consumers and the environment.

Manufacturers benefit from standards too. Clear, effective standards provide what every business longs for: certainty. When everyone plays by the same rules, manufacturers know they will be competing on a level playing field--and up their game to create new and better products: products better for the environment as well as for the customer. Since standards don't specify a particular technology or design, they drive innovation across the board. Innovation in energy efficiency leads to innovation in other areas as well: that is demonstrated by the decline in purchase price that has accompanied stronger standards.

The last set of updated refrigerator standards were jointly proposed by industry and efficiency experts working together. And just this week the industry joined NRDC and others in proposing new efficiency standards for central air conditioners. Same goes for dishwashers, industrial pumps, electric motors and more.

In my work as a member of the Technical Committee of the ISO, an international standards organization, I've seen that standards are not something arbitrarily imposed by bureaucrats. They are the result of exhaustive, data-driven research and planning by engineers, policy experts, and energy efficiency experts like myself----working in collaboration with industry representatives. When the benefits are clear to all parties involved, these standards get results.

Standards are so critical to progress that the American Society of Mechanical Engineers (ASME) ranked the promulgation of standards among the Top 10 engineering accomplishments of the last century--right up there with the automobile and airplane.

Federal efficiency standards create better markets for business, stronger products for consumers, and a safer environment for all. Attempts to roll back energy efficiency standards is a foolish attack on highly successful measures that have delivered on their promise, and will continue to deliver for decades to come.

About the Authors

David B. Goldstein

Codirector, Energy program

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