Boosting Energy Efficiency Nationwide Through Measurement and Performance-Based Rewards

Policy Brief
September 19, 2009

Energy efficiency is the most cost effective means for reducing global warming pollution. According to McKinsey and Company, the energy bill savings from efficiency investments could roughly offset the cost of implementing a mandatory carbon cap. And many of these investments already make sense economically: McKinsey estimates that a $50 billion per year investment could result in $1.2 trillion in energy bill savings by 2020 while reducing end-use energy consumption by about 23 percent of projected demand. In addition to saving Americans money on their utility bills, investments in energy efficiency would put downward pressure on electricity, natural gas, and carbon allowance prices (when a carbon cap has been established), while creating 600,000 to 900,000 new jobs. Establishing a reliable measurement for energy efficiency performance and rewarding success in improving performance will help America reach its full energy-saving potential.