The Dernogalizer

June 14, 2009

The Next Stimulus

I came across an article about the incredible potential for US industry to save significant on their energy costs while at the same time reducing emissions, thanks to a strong commitment to energy efficiency in the economic stimulus.

“The $787 billion federal stimulus bill contains some $60 billion of grants and incentives aimed at cutting energy use. In addition, 19 U.S. states have adopted mandates that essentially compel electrical utilities to find and finance energy savings for their customers.”

Getting more specific, the article mentioned at a 10% energy efficiency improvement by US industries would lead to $6.6 billion dollars annually.  A recent study that came out by the American Council for an Energy Efficiency Economy found that the current Waxman-Markey climate bill in Congress will create 250,000 jobs by 2020, and 650,000 by 2030.  The savings are even more profound, with an average of $750 per household by 2020, and $3900 by 2030.  These are big savings, and the energy efficiency provisions of Waxman-Markey are what make the climate change bill a net saver for American’s wallets, and a net gain for US GDP.  As I wrote before, every $1 invested in efficiency can yield up to $4 in savings over the life of the investment.  That’s a 400% return on investment, which is good by anyone’s standards.  Energy efficiency also adds value to homes and businesses.  Anyone who has sold or bought a house probably had an experience where an appraiser comes in and estimates the value of the home.  One of the big things they check is how up to date and efficient the energy systems are.

Energy efficiency is why hitting the short-term target of 17% below 2005 levels by 2020 is so easy.  It’s why this bill will stimulate the economy(without the deficits), will create hundreds of thousands of green jobs, and help inspire innovation.  Good paying jobs.  Energy efficiency is a repetitive tax cut that lasts for decades.

There’s a catch though.  These tremendous energy efficiency savings in Waxman-Markey come with solid building codes, and a mere energy efficiency standard of 5% built into the Renewable Electricity Standard.  According to the study I referenced by the American Council for an Energy Efficient Economy, if we increased this standard to a mere 10%, the cumulative savings would be $50 billion dollars by 2030.  Not that we should only stop at 10%, it’s estimated by the Council that with a good energy audit and an aggressive overhaul of energy systems, with only current technology we can reduce energy usage 25-30 percent.  Based on what I’ve been seeing with new strides in high-tech central manager energy systems, we can go much higher in large facilities.

Take that, and try to wrap your head around how many jobs that would mean, how much money people would save, and how many greenhouse gas emissions we would prevent from every entering the atmosphere.  Why would we not go for that?

Yes, the energy efficiency provisions in Waxman-Markey will do a lot of good things.  They aren’t even that strong.  Let’s make them stronger, lets make them the next stimulus.



  1. […] Cross-Posted from: HERE […]

    Pingback by The Next Stimulus « It’s Getting Hot In Here — June 14, 2009 @ 3:22 pm | Reply

  2. wow, good idea, thanks for share 😀

    Comment by Home Improvement — June 20, 2009 @ 7:08 am | Reply

  3. Thanks for this great post! I look forward to reading more from you!

    Comment by Jared — June 20, 2009 @ 2:20 pm | Reply

  4. […]  A couple things to note, why is this bill actually a net gain for the economy?  Because of the energy efficiency provisions in the bill.  The last thing the writer didn’t address was the one actual number Palin had […]

    Pingback by Sarah Palin’s Terrible Op-Ed « The Dernogalizer — July 14, 2009 @ 10:50 am | Reply

  5. […] energy efficiency to solve the climate crisis and save Americans a ton of cash in the process(see here).  McKinsey & Company have documented in incredible detail how much potential this resource […]

    Pingback by Stunning Energy Efficiency Potential « The Dernogalizer — July 29, 2009 @ 3:23 pm | Reply

  6. […] The NY Times had an article a couple of days ago about a now job creating measure that is receiving some attention from the Obama Administration.  It’s called “Cash for Caulkers” which is fancy for home weatherization.  Let’s hope it ends up as a policy.  Could be the next stimulus. […]

    Pingback by Cash for Caulkers on the Table? « The Dernogalizer — November 20, 2009 @ 11:30 pm | Reply

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