Tuesday, April 14, 2009

Waxman Markey Draft Part II: Efficiency

It is good to see energy efficiency featured prominently in the draft, as Title II.  Energy efficiency has been a large part of the mitigation strategy of countries like Japan, where buildings and households have been rather efficient.  The extent to which this can take a bite out of global emissions remains to be seen; however, to the extent that we are uncertain about how effectively the world can meet emissions and climate targets globally, energy efficiency is a promising way to move in the direction of climate mitigation, with deliberate certitude.

                In particular, the draft provides incentives for states to make more stringent building codes, authorizes retrofit funds, and calls for the development of a new rating system for buildings; there is no federal code that is imposed directly by the bill, unsurprisingly.  Building efficiency could perhaps have an impact with respect to mitigation if taken very seriously; it was touted as a “wedge” in 2004.  It’s strange, but for some reason 2004 seemed like a popular time to make overly optimistic predictions about the climate, and our trajectory in mitigating emissions.  To this end, the draft proposes rebates for poor families living in old homes who wish to move into more efficient, newer homes.  This sounds well and good, but its feasibility will be entirely dependent on the housing market, at least to a degree. 

                This title also asks the DOE (who’s rhetoric has been similar to this bill in other areas such as  coal) to impose appliance efficiency standards.  It is unclear what sort of impact this would have, although it does appear to mesh synergistically with the draft’s advocacy for further deployment of smart grid technology in Title I.

                A commendable move by the draft is its call for the Obama administration to reconcile federal automobile standards with those of California.  By having the EPA simplify its code for transportation efficiency, loopholes can be reduced and the mitigation impact can be amplified in a (again synergistic) way.

                Next, the draft asks for utility efficiency.  It calls for utility companies to increase efficiency such that consumers will cut their natural gas and coal consumption by roughly 1% by 2012%, and well over 10% by 2020.  While I do not feel qualified to comment on how appropriate this time scale is, my sense is that it would be more productive to focus on particular mechanisms by which this could be done.  At the same time, should such a regulation pass with teeth, then the buck would be passed to utility companies; given the already intense opposition to this bill, and the considerable clout that industries affected by this provision has, this section does not seem likely to prevail.  At best, perhaps, the target will move before the teeth of regulation have an opportunity to leave a sufficiently painful bite mark.


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