Former
Secretary of Defense William Perry, now a Stanford University professor emeritus
of management science and engineering, lists biomass, plug-in hybrid cars,
nuclear power, more natural gas, and energy efficiency as the only potential
near-term answers to easing the United States’ emissions of greenhouse gases
and addiction to oil.
Of these
items, what is the most important?
“I would
put energy efficiency as No. 1 on my list,” Perry said recently at a
Stanford conference. “We should redouble our efforts.” Biomass and
hybrid cars are still developing, he said, and nuclear power faces too much
public resistance, at least in the U.S.
Perry said
that wiser energy use holds advantages for the economy, as well as for the
environment and security. For example, two-thirds of the U.S. trade
deficit is due to oil imports, but stricter mileage standards could reduce
prices and imports.
Perhaps
surprisingly, Perry is not the only former military chief pressing for greater
energy efficiency. At the same meeting, Robert M. Hill, Australia’s former minister of
defense, described his country’s renewed attempts to cut waste. The Low
Carbon Australia trust, which finances
efficiency improvements in private buildings with public funds, is chaired by
Hill, a member of Australia’s
main conservative party and a professor at the University of Sydney.
“It’s
quite criminal how much energy we waste,” Hill said at the U.S.-Australia
Dialogue on Energy Efficiency conference, organized by Stanford’s Precourt
Energy Efficiency Center (PEEC) and the government of Australia through its consulate
in Los Angeles.
Despite the
potential benefits to the environment, economy, and national security, most
governments have not acted decisively to reduce energy waste. “Visionary
statements” have been followed up by little real action, said Howard
Bamsey, a
professor of climate change and energy security at the University of Sydney’s
U.S. Studies Centre.
Many of those
who control energy research dollars are fundamentally hostile to any area but
technology, said PEEC Director James Sweeney. “We as a nation talk a damn good game, but
we play a very bad one.”
Efficiency
gains could reduce the burning of fossil fuels in the United States
by at least 20%. Near term, that would reduce greenhouse gas emissions far more
than even the most optimistic projections for the growth of renewable supplies
like solar and wind power, said Sweeney, a professor of management science and
engineering.
Sustainability
champions in the private sector hold the same conviction. “Energy
efficiency is the cheapest and most readily available source of alternative
energy there is,” said James C. Davis, an executive with Chevron Corp.
Sweeney said
that scientists and engineers will eventually make solar cells, electric cars,
and other technologies cost-competitive, and some efficiency measures also need
further technological development, like better information and control systems.
But, he added, economically attractive efficiency steps that can be taken now
with existing technology are the bridge to a low-carbon future.
Even when
governments like the State of California
offer generous incentives to consumers and businesses for using energy more
efficiently, people’s habits have so far proven difficult to change, conference
speakers agreed. Behavioral barriers hinder even those improvements that
provide environmental benefits at no (or negative) costs, Sweeney said. These
obstacles include relatively low electricity costs, tight credit markets, scant
corporate recognition for managers who take action, and a lack of knowledge.
Including
subsidized environmental and defense costs in the price of gasoline and
electricity through significantly increased taxes on fossil fuels would help
motivate efficiency, several speakers said at the conference, but a
“carbon tax” is a tough sell politically. Australia’s current Labor
government has enacted such a tax, set to take effect this spring. Polls
indicate the government will be thrown out at the next election, and the
opposition has promised to cancel the carbon tax.
Still, there
is reason to hope. Some companies are learning how reducing energy waste can
contribute substantially to the bottom line despite Wall Street’s preference
for revenue growth over cost cutting. Chevron’s Davis noted that the oil major has improved
its performance by 30% since it started working on the issue about 15 years
ago. That contributes $3 billion a year to the company’s bottom line, according
to Davis,
president of Chevron Energy Solutions, a subsidiary that advises businesses on how
to reduce energy costs.
For
individuals, research at Stanford and elsewhere has shown that once a new
behavior—like driving more economical vehicles—gains some traction, it can
become the new normal quickly. To most people, energy efficiency is not
“sexy,” said Leon Young, chief executive of Change2, a sustainable
environment company with operations in the United
States and Australia.
“But, if
people feel that they are part of something bigger, that millions of households
are doing the same thing, then it becomes really important,” Young said.
And California’s utility
regulations designed to promote thrift in electricity and natural gas use have
been adopted by more than a dozen other states, said Ralph Cavanagh, the Natural
Resources Defense Council’s senior attorney and a pioneer on such policies.
“In terms
of total U.S.
sales, that’s about a third of electricity and 40% of natural gas,”
Cavanagh said. “It will be a slog and the debate is not over, but it is
happening.”
A group of
students at the Stanford Graduate School of Business are figuring out which
financing mechanisms for energy efficiency investments have been successful,
said Joe Nation, a public policy expert at the Stanford Institute for Economic
Policy Research. Their report is due out in a few months.
Much has been learned about how to motivate people to conserve energy, and
much is still to be learned, said Sweeney. For the environment, economy, and
national security, continued effort is crucial. “You never know. Sometimes
you hit a home run, sometimes a single and sometimes you strike out,” he
said. “But you’ve got to swing the bat.”
