Like most Americans, I'm guarding my dollars. But when my furnace died during Seattle's coldest winter in decades, I had to replace it. The costs and gains of replacing that old furnace with a high-efficiency model underscore key lessons about what we need to do to craft a stimulus package that actually builds for America's future.
My new furnace saves energy and fights climate change. It promotes American jobs, and it saves enough on my bills to pay for itself in a reasonable time frame. It also shows how much we can gain by genuinely renewing America's economy instead of encouraging the same consumption for consumption's sake that has helped create our current problems.
Let's look at what my $5,000 purchased. It supported Trane's factory workers in Trenton, N.J., and in their main plant in Tyler, Texas; it supported local Seattle installers; and it supported beleaguered city and state governments in New Jersey, Texas and Washington through the sales tax I paid and the taxes paid by the companies involved. In my personal economy, the new furnace will save me more than a third of my yearly gas bill and a commensurate amount of my CO2 emissions. My old furnace was a 13-year-old, 70% efficient model that was down to barely 60% efficiency. (Single-cycle furnaces lose 1% a year as their burners corrode and heat exchangers get less efficient.) The new furnace is 97% efficient and will maintain far more efficiency because its variable speed motor is much easier on its components. I live in a relatively small and well-insulated house in a generally temperate climate, and I keep my thermostat low, but I've still been spending $850 a year on gas heat (solar panels take care of most of my hot water). The savings from the furnace's extra-efficient fan will save roughly $340 a year at current gas prices, and more as fossil fuels of all kinds become scarcer and more expensive. If natural gas prices continue to increase at their recent rate—61% in the past five years—my investment will pay back in roughly nine years. That's a far better and safer return than I could get from any bank account or roller-coastering stock market investment. If I lived in a colder climate or had a larger house, the furnace would pay off even sooner. I'll also prevent the release of roughly three tons of CO2 every year.
So how do we make similar choices affordable for everyone, whether or not they have the cash on hand to do this on their own? Imagine if the pending stimulus package helped people nationwide make such investments by combining direct incentives with low or no-interest loans, along the lines of those advocated by Al Gore. Imagine if it prioritized energy efficiency and investments in renewable energy technologies, particularly those that are American-made.
I'm not saying high-efficiency furnaces will solve all our economic or environmental challenges. Plugging building leaks, adding insulation and switching light bulbs give the maximum energy efficiency for the least expenditure of dollars. We also need solutions that move us toward eliminating fossil fuel use altogether, solutions such as solar thermal power, industrial-scale wind power, advanced geothermal power, ultra-efficient green buildings, and smart electrical grids. The Swedish city of Malmo, population 300,000, already gets 40 percent of its residential heat (and 60 percent of its electricity) from a municipal incinerator, and it is steadily extending its district heating to the suburbs. We could do the same. But adding a high-efficiency furnace buys time—like scrapping a Hummer to drive a hybrid. It takes us part of the way—and if the furnaces are American-made, does so while keeping money in our domestic economy. If we could replace every furnace older than 10 years with a high-efficiency model and mandate the same in new construction, we would come out far ahead.
Every industry is hurting these days, and they all have their hands out for government cash. But if we spend $700 billion or $1 trillion to jumpstart the economy without simultaneously addressing root problems like fossil fuel dependence, we may not have the resources to do so later on—or when we do, they'll require far more sacrifice. My furnace upgrade was a necessity, but it symbolizes a fundamental choice about the direction of America's economy, and the stimulus package aimed at reviving it.
We can continue to support consumption for its own sake. But while $5,000 granite countertops might look swell, they don't solve global warming, heal our trade deficits, or move us toward a more sustainable society. Nor do endless truckloads of foreign-made Wal-Mart goods, nor $3,000 suits, $100,000 necklaces, and fifteen-million-dollar mega-mansions. At some point, we need to shift incentives and priorities. We probably need fewer people working at mall stores and more manufacturing wind turbines and retrofitting houses. Even if this means we won't be able to buy as many cool toys, we would actually be investing in the future instead of cannibalizing it. If we make enough of these investments, we might even look back on this moment as a national turning point—much as we do now to the wise choices made during a comparable economic challenge 75 years ago from which we emerged with a far stronger and more equitable economy than ever before.