Why will meeting near-term U.S. greenhouse gas targets be so damn cheap and easy? Because we live in The United States of Waste. The U.S. economy is incredibly energy inefficient, a key reason even strong climate action has such a low total cost — one tenth of a penny on the dollar. Indeed, as McKinsey recently showed, the U.S. can meet entire 2020 emissions target with efficiency and cogeneration while lowering the nation's energy bill $700 billion!
As but one more example, the NYT has a little story today that shows even the Department of Energy, like pretty much every major company I have ever worked with on greenhouse gas reduction, fails to take advantage of even the most cost-effective energy strategies:
The Energy Department strives to be a leader in championing energy efficiency. Its Web site lists energy-saving tips, while Secretary Steven Chu calls conservation one of the department's most important goals.
But at many of the agency's buildings, even at national laboratories where talented scientists seek technological breakthroughs to save energy, the department has failed to use one of the most effective tools available to any ordinary household: thermostats that automatically dial back the temperature when nobody is around.
A recent audit found that the department could save more than $11.5 million annually in energy costs by properly employing these "setback" controls to adjust the heat and air conditioning at night or on weekends.
Seems obvious. The larger point is that even at an organization devoted to energy, there is very little institutional effort behind achieving savings or reducing waste — something I found out myself when I was there in the 1990s (see "Energy efficiency, the low hanging fruit that grows back").
This story has many fascinating nuggets in it:
The Energy Department's inspector general found that the department, which spends almost $300 million annually on utilities, could save enough energy to power more than 9,800 homes each year by doing what experts say every household in the country should also be doing.
The payback would far exceed the costs, and in some cases the equipment has actually been installed but is not working….
Lane Burt, an energy policy analyst for the Natural Resources Defense Council, said the department's failure to use setbacks "was literally leaving money on the table."
"They've actually invested taxpayer money to be more efficient, and then failed to use it," Mr. Burt said. "It's like a double penalty. But the good news is that because many of the systems are installed and ready, the savings can begin immediately."
The inspector general reviewed 55 buildings at four department sites for the audit, finding that the agency had either not used or not suitably maintained setbacks at 35 of those buildings.
This, of course, is precisely why major organizations should have a serious program to regularly check that equipment is working properly and being operated optimally (see "Building Commissioning: The Stealth Energy Efficiency Strategy").
The report found that at two buildings at the Los Alamos National Laboratory, a National Nuclear Security Administration facility in New Mexico, facility operators were not trained to operate setback controls. At the Oak Ridge National Laboratory in Tennessee, part of the Office of Science, setback equipment was not replaced in two buildings after a 2008 electronic control system failure because officials there "planned to implement campus-wide energy conservation measures in the future."
And the property manager for two recently leased buildings at the Y-12 National Security Complex, an N.N.S.A. facility in Tennessee, told auditors that the buildings' owner had not obtained software needed to use setbacks.
In the report, some department officials implied that financing issues could have contributed to setbacks' not being used, while others said their use "was simply not a priority." For its part, the inspector general's office said it "could find no plausible reason for the lack of interest.."
"We could not obtain what we considered to be a satisfactory explanation as to why the department failed to take advantage of this conservation practice," the report said, "one that is generally low cost and has limited, if any, adverse impact on operations or building occupants."
Harvey Sachs, a senior fellow at the American Council for an Energy-Efficient Economy, said he was not terribly surprised by what he called "just one example of almost universal market failures" when it came to energy conservation.
"If I was in the nuclear management business," Mr. Sachs said, "I imagine there would be much more urgent stuff for me to worry about than where the thermostat is set."
But, he added, the results of the audit were another sign that "for a lot of reasons, energy efficiency has not gotten as much play as it should have."
The climate and clean energy bill has a remarkable number of pieces aimed at overcoming these market failures and capturing the enormous efficiency opportunity (see "The triumph of energy efficiency: Waxman-Markey could save $3,900 per household and create 650,000 jobs by 2030"). If we are smart enough to pass it, the country will drive some $40 billion a year in private sector investment in energy efficiency (see "The only way to win the clean energy race is to pass the clean energy bill").
