While cap and trade gets all the press, there's a vital provision in America's potential future climate law that keeps getting overlooked: energy efficiency.
That's unfortunate, because this least-cost, readily available resource could deliver one million new jobs by 2030 – if Congress would just improve upon the current policy.
The Washington-based American Council for an Energy-Efficient Economy (ACEEE) crunched the numbers on the efficiency portion of the American Clean Energy and Security Act (ACES), which passed the U.S. House in June.
Here's what it found: Current efficiency measures in the bill would create 600,000 new jobs by 2030, save consumers an average of $486 a household, and avoid the need for 419 new coal plants.
Those are impressive benefits. But as striking as they are, they only represent half or less of what efficiency could offer the nation.
The legislation's present building codes and appliance standards are adequate, according to ACEEE. But the law's centerpiece measure, a combination renewable electricity and efficiency standard, is not.
The two-in-one standard would require utilities to obtain 20 percent of their energy from a mix of clean electricity and energy savings by 2020. Energy efficiency would be allowed to meet up to 8 percent of that 20 percent goal.
If this becomes the final form of the policy, it won't be good enough to do the job, suggests ACEEE.
Instead, Congress should split the standard into two, creating a stand-alone renewable electricity standard and a stand-alone federal energy efficiency standard (EERS). The EERS should require electric utilities to achieve 10 percent energy savings by 2020.
If Washington enacts an EERS, then national energy and carbon savings would soar. Look at the states for proof. In 2000, only 2 states had energy efficiency standards. Today, 19 have implemented successful policies. Several others are considering similar programs.
"Experience in the states that have energy efficiency programs demonstrates that efficiency is the quickest and most effective way to reduce energy usage and address climate change," says ACEEE in its report.
A national EERS would commit every single state to energy and CO2 savings way beyond the level achievable by the states currently acting alone. In fact, in a previous analysis, ACEEE found that a strong federal EERS would reduce peak electric demand by about 117,000 MW by 2020. That's equivalent to 390, 300-MW dirty coal plants.
This policy's a no-brainer. But as Steve Nadel, executive director of ACEEE told SolveClimate, a number of powerful utilities oppose it. They argue that such decisions should be made by states, and that Washington should not get involved, he said.
This is a familiar excuse, made by defenders of fossil fuel interests to ensure more business as usual. But the truth is, many governors want national climate policy to support what they have already been able to do in their states and regions.
ACEEE has a solution:
"In our opinion, the federal government should set minimum requirements, as what one state does affects nearby states. But then states should be free to exceed these national minimums," Nadel said.
On top of a federal EERS, Washington must adopt two other "enhanced efficiency policies" to reap the most benefits of the nation's efficiency resource, ACEEE says.
One, Congress should require that a third of the electric utility allowances be used for energy efficiency improvements, just as ACES does with the natural gas allowances.
Two, Congress should extend the allocation of 9.5% of carbon allowance revenue to the State Energy and Environmental Development (SEED) fund to 2030. Currently, ACES ramps down SEED fund spending beginning in 2016.
Implementing all three policies would shrink national energy consumption by 14.5 percent and slash CO2 emissions by 959 million metric tons in two decades – the equivalent of removing 159 automobiles from the road.
Best yet, by 2030:
- The average American household would save $832.
- Over 1 million new jobs would be created.
- The need for 512 new coal plants would be avoided.
And for those spreading false claims that cap and trade would bankrupt America, there's more:
The annual household consumer savings from the energy efficiency provisions analyzed in the study would more than offset EPA's projected consumer cost of the cap-and-trade provisions in ACES, bringing net savings to Americans.
The House-passed bill is headed for debate in the U.S. Senate. An "Enhanced ACES," as ACEEE calls it, would guarantee that the advantages of energy efficiency get expanded to all U.S. states.
But the odds that ACES will be overhauled to the extent needed are still looking relatively slim.
"I think we have a very good chance of getting at least one of our major recommendations into the Senate bill, but it's too early to say which one or whether more than one might be possible," Nadel said.