IN THE battle against global warming, the United States isn’t even doing all the easy stuff yet.
The effort to reduce the world’s greenhouse gas emissions was supposed to start with people simply using less coal, oil and natural gas. Compared with the much tougher task of radically changing the way we produce energy, ending the needless waste of these carbon-heavy fossil fuels is relatively easy and affordable. There are many ways to do so that save people and companies money in lower energy bills. But it hasn’t happened, at least not to the extent it should. People still irrationally waste energy. This “efficiency gap” is a huge missed opportunity — potential electricity savings of 10, 20 or even 30 percent left on the table, depending on whom you ask and exactly what they’re measuring.
There are a variety of reasons why people use more energy than they ought. One is that people don’t always bear the costs of their inefficient decisions. Landlords buy appliances, but renters pay utility bills. Another is that people tend to underestimate how much energy they use in many cases, such as running big appliances. And the full social cost of fossil fuel-derived energy isn’t reflected in the price. Power companies burning carbon-heavy coal get to pump greenhouse gases into the air for free.
The first thing to do is to build the cost of pollution into the price of energy through a simple carbon tax or other market-based mechanism. Though the tax revenue could be rebated right back to people, higher sticker prices for fossil fuel-derived energy would still give them reason to change behaviors and demand more energy-efficient appliances.
A bill the Senate is preparing to consider will not do that, because taxing carbon dioxide emissions is a political non-starter right now. Besides, a recent Congressional Budget Officereport noted, making people pay the social cost of the energy they use might not solve that landlord-tenant problem. Instead, the bill takes a politically palatable but timid approach. It would prescribe, for example, the creation of voluntary national building codes and set aside some money to encourage states to adopt them and to train workers. It would give rebates to manufacturers that buy better motors and transformers. The federal government is the largest single user of energy in the world; the bill would require it to conserve by, for example, consolidating its energy-guzzling data centers.
The proposal would be stronger if, instead of just throwing money into tired policies such as worker training, it required states to improve their residential building codes to meet sensible national standards. Or, as the World Resources Institute’s Nate Aden suggested, it could establish a Race to the Top-style program that would encourage competition among states. But given Congress’s serial failure to agree on anything like smart energy policy, the bill on the table may be the best anyone can expect from lawmakers right now.