Report: Energy Efficiency Could Halve U.S. Greenhouse Gases by 2050

WASHINGTON, DC, July 30, 2009 (ENS) – Energy efficiency investments can provide up to half the greenhouse gas emissions reductions most scientists say are needed between now and the year 2050 to avert the worst effects of climate change, finds a new report from the nonprofit and independent American Council for an Energy-Efficient Economy, ACEEE.

The United States, along with the other governments in the Group of Eight industrial democracies, agreed earlier this month that by 2050, they will reduce their greenhouse gas emissions by 80 percent and work with all nations to cut global emissions in half.

ACEEE report author Skip Laitner concludes that investments in more energy-productive technologies can lead to big savings for U.S consumers and businesses on the order of $2 trillion dollars by 2050, measured in constant 2007 dollars.

The assessment report, based on the ACEEE’s reading of the historical record, argues that many conventional climate economic impact studies misread the historical record on the nation’s energy productivity opportunities.

The report “Positive Economics of Climate Change Policies: What the Historical Evidence Can Tell Us,” suggests that most studies that evaluate cap-and-trade policies either ignore or greatly understate the potential advances in energy efficiency, which the ACEEE calls “the largest and most cost-effective form of greenhouse gas mitigation.”

Natural daylight and energy-efficient fluorescent lighting in National Renewable Energy Laboratory’s Gold Hill office building. (Photo by Mike Linenberger courtesy NREL)

“The evidence shows that productive investments in energy-efficient technologies can enable the U.S. economy to save money and to substantially reduce its greenhouse gas emissions – both immediately and by mid-century,” says Laitner, director of ACEEE’s Economic and Social Analysis Program.

As part of the study, Laitner conducted a diagnostic review of the recent assessments of the H.R. 2454 climate change legislation, also known as the Waxman-Markey bill, which passed the U.S. House of Representatives by a narrow margin on June 26, 2009.

Climate legislation is now under consideration by the U.S. Senate, with action likely this fall.

Laitner says that, unlike most other studies, his report finds that U.S. consumers and businesses could see their energy bills cut in half by 2050.

Non-energy expenditures within the U.S. tend to be more labor-intensive and provide a greater rate of contribution to the nation’s Gross Domestic Product compared to expenditures on energy, Laitner concludes. “Instead of taking jobs away from the economy, the diagnostic assessment here suggests a small but net positive gain in the economy,” he says.

The report indicates that shifting away from the production and consumption of conventional energy resources, in favor of more productive investments in energy-efficient technologies, can lead to a more robust economy and to a greater level of overall employment opportunities in the United States.

“In contrast to climate policies based on international offsets and banking, an efficiency-powered policy can provide a benefit to the climate while actually causing a small but net positive increase in the nation’s economy and employment,” said economist and climate policy expert James Barrett, PhD, among those who reviewed the study for ACEEE.

Most economic policy models now suggest a negative impact on the economy if U.S. policymakers choose to reduce greenhouse gas emissions. Laitner says these outcomes “are an artifact of the models and not the data.”

“The evidence is compelling,” Laitner said. “With advances in new materials, new designs, and the emerging contributions from information and communication technologies, energy productivity gains can power the economy in new ways that reduce greenhouse gas emissions.”

“U.S. economic performance over the last several decades demonstrates that energy markets and consumer behaviors are much more dynamic than is commonly assumed,” said ACEEE research associate Chris Knight.

“The past and the anticipated future gains in technology performance indicate that a productivity-led climate policy can actually make the U.S. economy more competitive,” Knight said.

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