In more than one of our previous blogs, we’ve discussed the concept of energy efficiency and how it can fit into energy conservation efforts. To catch you up, energy efficiency is defined as using less overall energy to provide the same or better services; for individuals consumers, that would mean using all the same conveniences but getting a smaller bill from the electric company. For example, even though refrigerators sold today in the U.S. are 20% larger and 60% cheaper than their counterparts sold in 1975, they use 75% less electrical energy. For this reason, energy efficiency has been called the “fifth fuel” (the other four being coal, petroleum, nuclear power and green energy sources).
But here are the two big questions: What kind of financial and environmental benefits could be derived from energy conservation achieved through the implementation of more efficient products and practices? And if they are so significant, then why don’t more businesses and individuals take advantage of them?
The Impact of Efficiency
A New York Times column by David Bornstein published earlier this month provides some useful statistics on the impacts of energy efficiency. Striving for energy efficiency simply by retrofitting buildings in the U.S. could lead to stunning $1 trillion savings over the course of a decade, a study performed jointly by Deutsche Bank and the Rockefeller Foundation found in 2012. And if that figure isn’t convincing enough, the aforementioned study also found that retrofitting could reduce greenhouse gas emissions in the U.S. by 10% and stimulate job creation.
Buildings that have already been modified with efficiency in mind are seeing results consistent with those predictions. Initial investments are often paid back within just a few years of lowered energy usage, and (barring the destruction of buildings) the savings continue for many years after the principal is recovered. This means businesses, universities or government entities with large campuses would likely see a better return by improving their own buildings than they would by putting their money into other investments.
Money for the Taking
So why, if retrofitting for energy efficiency could lead to such significant financial and environmental savings, is it not happening on a mass scale? A classic joke relayed by Bornstein illustrates at least part of the problem: Two economists are walking down the street. The more junior of the two sees a $20 bill on the sidewalk and asks his senior colleague if he should pick it up. The experienced economist replies, “Don’t bother. It can’t be real. If it were, someone would have taken it already.”
“The idea that money is available for the taking defies economic logic,” Bornstein explains. “But sometimes it’s true.” And that’s certainly the case when it comes to energy efficiency, both on the large scale discussed in his column and for individual consumers just looking for some modest energy savings each month. Investing in efficiency, even when that simply means replacing an old refrigerator, must be thought of as a vital component in the future of energy conservation -- the numbers bear out that the returns on energy efficiency aren’t too good to be true.
What have you been doing to improve your energy efficiency? Share your thoughts in the comments.