WASHINGTON (March 5, 2009): A broad coalition of business, professional, energy, and environmental organizations released recommendations today on the role of energy efficiency in federal climate change legislation. Reducing the Cost of Addressing Climate Change Through Energy Efficiency is available at http://aceee.org/energy/climate/leg.htm
“Including energy efficiency in a cap-and-trade bill is essential because energy efficiency provides ‘avoided tons’ of greenhouse gases at the lowest cost,” stated Steven Nadel, the coalition’s coordinator and also the Executive Director of the American Council for an Energy-Efficient Economy (ACEEE). “Energy efficiency,” he continued, “reduces the cost of cap-and-trade because fewer new power-producing facilities are needed and because a smaller portion of existing facilities need to be upgraded to help meet emissions ceilings.”
Currently, the U.S. does not have a federal greenhouse gas (GHG) reduction requirement, although in recent years there have been various bills proposed to require such reductions. Both the House Energy and Commerce and Senate Environment and Public Works Committees are poised to revisit cap-and-trade legislation this session, with Energy and Commerce Chairman Henry Waxman (D-Calif.) hoping to push such legislation through the committee by Memorial Day.
Under cap-and-trade, the market will establish a price for greenhouse gas emissions allowances. The price of these credits will modestly add to energy prices. “Energy efficiency can slash greenhouse gas emissions at low cost and in large quantities. A carbon cap is essential to getting those savings but we don’t use all cost-effective energy efficiency now and we still won’t with a price on carbon,” stated Joe Loper with the Alliance to Save Energy (ASE). “We need to design the program right to wring carbon from our homes, offices, industrial plants, and vehicles,” he continued.
As the President of the American Institute of Architects (AIA), Marvin Malecha, FAIA, noted, “Energy efficiency is truly the low-hanging fruit in the climate change discussion. We can and we must make our buildings, appliances, and transportation systems more energy efficient.”
In addition to ACEEE, AIA, and ASE, other participants in the coalition are the Environmental and Energy Study Institute, Environment Northeast, Johnson Controls, Inc., National Association of Energy Service Companies, Natural Resources Defense Council, Sierra Club, and Real Estate Roundtable.
In order to spur efficiency investments under climate legislation, the coalition recommends two main approaches: providing funding for energy efficiency using revenue from carbon credits and adopting a set of complementary policies in an energy efficiency title to the legislation.
On the funding side, investment is needed rising to about $15-20 billion each year for energy efficiency deployment programs and policies in the residential, commercial, and industrial sectors. This is in addition to the more than $6 billion each year needed for low-income energy efficiency programs, $8 billion for transportation policies and programs, and $3 billion for clean energy R&D.
“This level of investment is consistent with the huge boost the economic recovery bill gives to energy efficiency programs, which have been ramping up over the past several years," said Jim Presswood with the Natural Resources Defense Council.
In addition to increased funding for targeted programs, additional policies are necessary to strengthen and reinforce the role of energy efficiency in reducing greenhouse gas emissions. These policies do not specifically address the carbon cap or distribution of funds in climate change legislation and, as such, are complementary to the cap. Complementary energy efficiency policy recommendations could be included in either an energy bill or a climate bill. Some of the major policies recommended include: establishing a national energy efficiency resource standard (setting utility energy saving targets); establishing advanced building energy codes and appliance standards; extending and enhancing current federal energy efficiency tax incentives; establishing programs to promote comprehensive energy retrofits to existing buildings including homes, commercial buildings, multifamily buildings, and assisted housing; and achieving an average of at least 42 miles per gallon for cars and light trucks by 2020.
“The recommended policies and programs reinforce how critically important energy efficiency is to any cap-and-trade program that seeks to reduce environmental impacts while enhancing the nation’s economy,” stated Derek Murrow with Environment Northeast.
The cap-and-trade program will also produce a major boost in employment. “We have seen a dramatic growth in energy efficiency jobs during the past decade,” said Donald Gilligan, President of the National Association of Energy Service Companies. “The industry today employs more than 1.5 million people. We can continue that growth with this legislation, and make energy efficiency a cornerstone of the American economy in the 21st century.”