Energy Efficiency and Public Policy

In early December I moderated a panel discussion at Columbia University titled "Energy Efficiency: What Really Works." The panel featured five terrific experts on this issue: Bridgett Neely, Vice President of Energy Efficiency at New York City’s Economic Development Corporation; Lloyd Kass, Director of the Energy Department at the New York City Housing Authority; Jay Bhalla, President of Willdan Energy Corporation (aka, Intergy); Luke Falk, Project Manager for the New York State Energy Research and Development Authority’s (NYSERDA) New York City office; and Peter Meloro, Section Manager of the Energy Efficiency Programs Department at Con Ed. Columbia graduate student, Sara Schonhardt, a research assistant at Columbia’s Earth Institute, summarized the discussion on the Institute’s website.

While it is true we will not solve the energy or climate crisis by efficiency alone, it is equally true that our wasteful and almost mindless use of energy is part of the problem.  These experts made a number of practical points about how to make better use of energy:

  • Willdan Energy Corporation’s Jay Bhalla focused on the energy wasted in computer data centers. Bhalla and his colleagues currently are working with NYSERDA to help make Mt Sinai Hospital’s data centers more efficient. Bhalla also mentioned that hotels in Europe and Asia routinely shut off room lights and wondered why US hotels did not do the same.
  • After telling us that his parents home in Florida uses more electricity in one day than he uses in his NYC apartment in one month, NYSERDA’s Luke Falk observed that the "Smart Cable" box that allows you to record TV when you are not at home, uses as much energy as your refrigerator.
  • Lloyd Kass discussed the incredible inefficiency of old hot water heaters and noted how important capital improvements can be to increasing the energy efficiency of older buildings.
  • Bridgett Neely discussed the difficulty of controlling energy use when the people who use a building do not see their energy costs charged directly and instead find them reflected alongside many other costs in their lease.
  • Peter Molero focused on the potential savings from more efficient light bulbs.

It was an interesting discussion, and reflecting on it, I was struck by the combination of factors that cause us to waste energy. Some of the causes of energy waste are technological – many of the tools of modern life require energy. Some are economic – we know that if we could afford to buy insulated windows, new air conditioners or more efficient water heaters, we could save money in the long run. In today’s financial crisis, we don’t have the capital to invest in saving energy. If we had the capital, the return from that investment might not be as favorable as other investments. Some of the causes of energy waste are simply habit. We are so used to limitless, cheap energy that we can’t be bothered to be efficient.

Our goal should be to use less and less energy per dollar of gross domestic product (GDP). By definition, increased efficiency will increase our standard of living. Our other energy goals must be to reduce the cost and environmental impact of energy use.

To achieve all of these goals, we need to use public policy to motivate and inspire socially beneficial private behavior. The tax code can be used to make it easier and more profitable to invest capital in energy efficient technologies and infrastructure. The government must fund the basic science and applied engineering needed to improve energy efficiency and renewable energy. As both Barack Obama and Mike Bloomberg have indicated, government must directly provide leadership by improving the performance of its own buildings and vehicles.

We know this can work. Public policy can influence private behavior. Take the example of mass transit in New York City. Twenty years of investment in the city’s mass transit system has resulted in people substituting mass transit for the automobile.  As William Neuman reported recently in the New York Times, "New York City grew, but traffic didn’t." According to Neuman:   

"As the city’s economy soared and its population grew from 2003 through 2007, something unusual was happening on the streets and in the subway tunnels. All those tens of thousands of new jobs and residents meant that more people were moving around the city, going to work, going shopping, visiting friends. And yet, according to a new city study, the volume of traffic on the streets and highways remained largely unchanged, in fact declining slightly. Instead, virtually the entire increase in New Yorkers’ means of transportation during those robust years occurred in mass transit, with a surge in subway, bus and commuter rail riders." 

This growth was a direct result of public investment and a policy of encouraging the use of mass transit. Now we are in danger of reversing that progress. Raising fares and disinvesting in mass transit will increase auto traffic once the economy rebounds.

The severe recession we are now dealing with poses real challenges to the leaders of our government and of all of our major public, private and non-profit institutions. Already pressure is building to view capital investment in energy efficiency as a luxury. It is not – it is a necessity. Some of the practices we need to adopt come at little or no cost: Turning off a light switch or shutting down a computer or a cable box is cost free. But many of the steps we need to take will cost money – even if those steps will save money in the long run. This is the moment when we will learn if America is capable of taking the long view and doing what is right, even if it is not easy. This is the moment when we will learn if our new leaders in Washington will live up to their promise and fulfill their "green" promises.