President's Budget Would Be Disastrous for Energy Efficiency

President Trump’s 2018 budget proposal would spell disaster for the many Americans who struggle to pay their energy bills, for the millions of people who work in clean energy jobs, and for our country’s global competitiveness.  Energy efficiency programs, which are the cheapest and cleanest way for Americans to take control of their energy use, are inexplicably among the biggest losers in the president’s budget. These programs benefit real, hardworking Americans every day and the impact on their energy use and budgets would be tangible.

Efficiency Standards

EPA

The biggest consumer energy savings program you’ve probably never heard of is one of dozens of Department of Energy (DOE) initiatives at risk of deep cuts -- or even elimination -- under President Trump’s extreme new budget proposal. By any measure, DOE energy efficiency standards for appliances and equipment have been one of the most successful federal carbon and energy reduction policies. Energy savings from efficiency standards are of a magnitude comparable to savings from other prominent policies such as vehicle fuel economy standards. And efficiency standards provide huge savings for customers: U.S. consumers and businesses will save an astounding $2.4 trillion thanks to products sold between 1987 and 2035

In spite of these huge savings, standards face unprecedented threats. The president’s budget proposal could cut Office of Energy Efficiency and Renewable Energy (EERE), which houses the standards program, by more than 50 percent. Programs operated under EERE boast a 20 percent annual return on investment—a figure that would make even a real estate tycoon envious. Cutting these programs means Americans almost certainly will face higher energy bills, there will be fewer jobs in the booming clean energy sector, and U.S. manufacturer innovation will be threatened by inferior foreign imports.

In addition, under the executive order released by President Trump on January 30, 2017, for every new standard or regulation a federal agency establishes—even though it defends our families, workers, and communities from harm—at least two existing measures must be scrapped ,regardless of the benefits they provide. This order jeopardizes the standard program by arbitrarily limiting opportunities for savings. Standards issued in the final days of the Obama administration could also be at risk.

The many benefits of efficiency standards are outlined in a new fact sheet released by NRDC. Highlights include:

  • Huge consumer savings. A typical U.S. household saves about $500 on energy bills every year, and standards are required to be cost-effective. This means that each standard must result in a savings above and beyond the product cost over its lifetime. Many products meet standards without costing consumers a penny more upfront.
  • Strong consumer support. In a 2016 post-election survey, 76 percent of Trump supporters said they back policies that require manufacturers to make appliances more energy efficient.
  • Manufacturers recognize the benefits, too. They prefer a single federal standard to a patchwork of requirements that vary by state. DOE’s standards enforcement division ensures that noncompliant products stay out of the U.S. market, which protects both manufacturers and consumers.
  • Jobs! Standards generated about 340,000 jobs by the end of 2010 and could create approximately 100,000 more by 2030. Jobs that require workers in America to install and service energy-efficient appliances and equipment cannot be outsourced.
  • Reduced pollution, and corresponding health benefits. By reducing the need for electricity, efficiency standards cut carbon pollution from power plants, which means there are fewer asthma and allergy symptoms, a reduced risk of heart attack and nervous system issues, and fewer premature death for millions of Americans.

ENERGY STAR®

EPA

The President’s budget zeroes out the highly popular and incredibly effective ENERGY STAR program. ENERGY STAR, with an annual budget of approximately $50 million, paved the way for $34 billion in annual consumer and business savings in 2015 alone. This trusted, 25-year-old program has long enjoyed bipartisan support. For every dollar Americans invest in energy efficiency through ENERGY STAR, they save, on average, $4.50 their energy bills and prevent more than 35 pounds of climate-warming pollution. Consumers overwhelmingly recognize and approve of ENERGY STAR: 89 percent of households recognize the label, which is meant to represent the top 25 percent of products on the market.

This high brand recognition benefits manufacturers, as well. One study showed that consumers would even be willing to pay between $250 and $350 more for a refrigerator with an ENERGY STAR label. Meanwhile, almost 300,000 Americans are employed in manufacturing ENERGY STAR-rated appliances or other products such as energy-efficient building and lighting services. 

Federal energy efficiency standards and the ENERGY STAR labeling program both have a strong track record of success. These programs have been quietly saving billions of dollars every year for millions of Americans, including low-income households that bear a disproportionate burden of energy costs, creating jobs, providing a boost for U.S. manufacturers, and reducing air and climate changing pollution. With continued bipartisan support, energy efficiency standards and the ENERGY STAR program can provide benefits for decades to come. To learn more, take a look at NRDC’s standards fact sheet here, and NRDC’s ENERGY STAR fact sheet here.

Among the other energy-saving programs that will be eliminated under the president’s proposal:

  • Programs that benefit low-income Americans, including the 40-year old Weatherization Assistance Program (WAP). WAP got its start during the energy crisis of the 1970s, and since then has made more than 7 million low-income homes more energy efficient, generating average savings for these families of $283 a year. That’s real money in the pockets of struggling Americans – and the president is proposing to completely terminate the program.
  • Programs that spur innovation, including the Advanced Research Project Agency—Energy (ARPA-E), which was established by President George W. Bush and funds research on transformational energy technologies—everything from energy storage innovation to autonomous cars to cutting-edge energy efficiency technologies for windows and household appliances.
  • Programs that help improve vehicle technology and fuel efficiency, including the Advanced Technology Vehicle Manufacturing program, which helped Tesla develop its now highly successful line of electric vehicles and gave funds to Ford to upgrade manufacturing facilities in Illinois, Kentucky, Michigan, Missouri, and Ohio.
  • Programs that provide energy funding in all 50 states through the State Energy Program (SEP) funds.

It’s hard to argue that eliminating these programs—which create domestic jobs, protect consumers from high energy bills, help provide more affordable housing, save money for state and local governments, and help bring technological breakthroughs into the daily lives of all Americans—would really make America great again. These DOE and EPA initiatives have a track record of success and promise to keep America moving forward. Slashing clean energy budgets in accordance with ideology rather than fact would put America’s progress toward a better future at great risk.  

About the Authors

Lauren Urbanek

Senior Energy Policy Advocate, Energy & Transportation program

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