Energy Efficiency Needs a Better Lobby

Rob Day is a pretty darn amazing guy. He's read the more coherent parts of my mind and organized it into a how-to guide for government action. Rob's Cleantech Investing blog is one of the only sites that matter. Here's his latest, published in its entirety, entitled:

Energy Efficiency Needs a Better Lobby!

There are two critical roles for energy efficiency in upcoming 2009 federal legislation. But you almost never hear about them.

First of all, energy efficiency is shovel-ready. In other words, if you’re looking to have an immediate impact on both green-collar jobs creation and cost-effective carbon emissions reductions, you absolutely have to include energy efficiency retrofits into the equation. For example, look at commercial building energy efficiency retrofits: The technology is available already; The nature of the work is service-oriented and building controls and HVAC and lighting are readily “trainable” for new recruits; and the economics often make perfect sense, if only regulatory support would help address the upfront capital cost hurdle.

And yet what I hear from folks battling inside the Beltway right now is that energy efficiency support has been one of the items on the chopping block in all the Stimulus Package horsetrading. Apparently the CBO came out with a report saying that much of the energy efficiency incentives put into the bill wouldn’t have an effect until 5 years out? I haven’t had a chance to review the specifics, but I would find that hard to swallow if true.

And while I’m also a big supporter of renewables, it’s hard to make a case that regulatory support for solar panel manufacturing (for example) would be something that would have a 2009 jobs impact, and in fact much of that market will eventually go overseas. I’m not arguing against support for solar panel manufacturing, we have technology leadership reasons for wanting to pursue that as well, and good green manufacturing jobs should be encouraged in any case. But if your metric is jobs creation in 2009, it’s tough to make the argument that renewables should be prioritized over energy efficiency. And yet, apparently, that’s what the pencil-pushers are doing.

Secondly, energy efficiency could play a critical role in any climate change regulation that comes out.

To begin with, from a “wedges” perspective we cannot afford to ignore the role energy efficiency must play in any comprehensive climate change effort. It’s not sufficient, but it sure is necessary.

Also, from a timing perspective, once again energy efficiency shines versus alternatives like sequestration and renewables. It’s reductions we can do immediately, not after further waited-for innovations.

Finally, and most tactically, energy efficiency based carbon offsets may be very powerful in bringing key Senators “onsides” with carbon cap-and-trade regulation. As we all watch how critical it is to reach 60 votes in the Senate, it’s important to recognize that major regions of the country consider themselves to be at a severe disadvantage in a cap-and-trade scheme, because (rightly or wrongly) they feel they lack the renewable generation potential (solar, wind, geothermal, etc.) of other regions. Specifically, the US southeast feels disadvantaged versus the west or northeast. It would be very easy for regional blocks to stand in the way of effective cap-and-trade regulation.

But of course, one potential “resource” that the US southeast has is lots and lots of inefficient air conditioners. It’s an easily mined source of offsets to help them meet their requirements — if energy efficiency-based offsets are included as a key source.

Energy efficiency does face some technical challenges (for example, establishing accurate baselines and proving “additionality”) if it’s to be included effectively in any scheme. It gets complex quickly. We’ll talk another time about these complexities and possible ways to deal with them.

But it’s worth wrestling with these details, because otherwise it’s tough to see how we get to 60. And without that, the political efforts of a lot of people who are currently ignoring energy efficiency may be wasted anyway.