The triumph of energy efficiency: Waxman-Markey could save $3,900 per household and create 650,000 jobs by 2030

The energy efficiency provisions in the House energy and climate bill (H.R. 2454) could save $750 per household by 2020 and $3,900 per household by 2030, according to an analysis by the American Council for an Energy-Efficient Economy (ACEEE).   An ACEEE news release notes that not only will efficiency reduce the costs to consumers and businesses of cutting carbon pollution:

ACEEE estimates that approximately 250,000 jobs will be created by the energy efficiency provisions in H.R. 2454 by 2020, with a total of 650,000 jobs generated by 2030.

The bill’s authors clearly understood that Energy efficiency is THE core climate solution — the biggest and lowest cost carbon-free resource by far.

The ACEEE agrees with CP and major environmental groups that a key improvement for progressives to pursue would be to “require utilities to reduce electricity demand by 10 percent by 2020” (as opposed to the 5% to 8% the bill allows), which would result in an extra $50 billion in cumulative consumer savings by 2030“”savings that Waxman-Markey is leaving on the table.

The bill has a remarkable number of energy-saving provisions [click to enlarge].

Here is ACEEE’s discussion of the key efficiency provisions of the bill (and go to their original analysis for a detailed spreadsheet of the electricity, natural gas, and CO2 savings of each provision):

The bill includes a number of key policies designed to maximize savings from energy efficiency, including improved building codes, appliance and lighting standards, and residential and commercial retrofits.

Allocations detailed in Section 782g direct 9.5% of allowances in 2012 (and decreasing amounts thereafter) to go into a State Energy and Environmental Development (SEED) account to be used by state and local governments for efficiency and renewables projects. The allocations to the SEED account will provide the funding for the REEP (Retrofit for Energy and Environmental Performance) program, transportation planning, building labeling, and other important energy-efficiency measures. At least 20% of the SEED money must go to funding renewable energy programs. Because the exact allocation of the SEED money will be the choice of local and state authorities, anywhere from 20-80% of the SEED money could go to energy-efficiency measures. Our analysis assumes that 75% will go to energy efficiency, providing savings as high as 2.45 quadrillion Btu’s in 2020 and 4.85 quads in 2030 (the average U.S. state uses about 2 quads/year).

Free allowances are given to natural gas utilities beginning in 2016 (Section 782b), one-third of which must be used specifically for energy efficiency. The allowances to efficiency will begin at 3% in 2016 and will ramp down over time. This could provide as much as 0.61 quads of savings in 2020 and 1.59 quads of savings in 2030. In addition, states will receive allowances based upon heating oil consumption (Section 782c), one-half of which must be used for energy efficiency programs. These allowances will be worth 1.875% of the total in 2012, ramping down to .03% in 2029.

The allowances will also be used to fund a number of other important energy efficiency programs, many of which will provide considerable monetary and energy savings for consumers. Section 201 directs 0.5% of the total emissions allowances to go to the implementation of stricter building codes. These codes will provide for 30% improvements in 2010, 50% improvements in 2014 for residential and 2015 for commercial buildings, and 5% additional improvements every 3 years after 2017/2018. Building codes are one of the most significant portions of the legislation, providing 9% of the savings from the bill in 2020, and 13% of the savings in 2030.

See “Better buildings soon? Energy and climate bill would set national energy codes.”

In addition, 1.5 % of the total allowances will be used to fund clean energy innovation centers (Section 171), which will conduct R&D on eight different categories of clean energy, including building efficiency and transportation efficiency. These will be administered by the Department of Energy, and the R &D innovations created by the centers are likely to save as much as 3 quads in 2030.

The savings Waxman-Markey could achieve are huge:

In total, the energy efficiency provisions in H.R. 2454 could reduce U.S. energy use by 4.4 quadrillion Btu’s, which accounts for about 4 percent of projected U.S. energy use in 2020. These energy efficiency savings are more than the annual energy use of 47 of the 50 states, including New York State. Moreover, such savings will avoid about 293 million metric tons of carbon dioxide emissions in 2020, the equivalent of taking 49 million cars off the road for a year. By 2030, these energy efficiency savings grow to 11 quadrillion Btu’s, accounting for about 10 percent of projected U.S. energy use that year.

Imagine what the savings could be if we can improve the efficiency provisions in the bill.

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11 Responses to The triumph of energy efficiency: Waxman-Markey could save $3,900 per household and create 650,000 jobs by 2030

  1. K L Reddington says:

    “ACEEE estimates that approximately 250,000 jobs will be created by the energy efficiency provisions in H.R. 2454 by 2020, with a total of 650,000 jobs generated by 2030.”

    We are seeing unsupported assertions. I have no reason with 9.4% unemployment to believe this. Unemoployed are looking at homelessness more reaslistically than all new appliances. As a real economist, this is an insult.
    Fortunately real architectural engineers don’t opffer thes tyopes of promises.

    Truth is we have a 40 % drop in home values. That of course wipes out equity and what else? it wipes out the home equity line of credit.
    These are not real and new jobs. They are jobs folowing the elimination of other jobs.

    Today unemployment is 9.4% and on the way to 11% very rapidly. the hundreds of thousands of promised jobs were dishonest projections. They just are not there.

    The energy taxes will eat up moneys allocated to weatherizing, apliances. new refrigeration etc.

    Just a little technology insight. The HVAC equipment that will be for sale 15 years from now is not only not on the market, it is invalid to place a price estimate on it.

    It does appear much of this legislation is fear driven and the estimates come from political movements and not construction and industrial estimates.

    A lot of the equipment will be imported because of other adverse legislation pertaining to health insurance mandates and taxation.
    Example. Emerson moved a Copeland a/c compressor plant to Mexico. The whole industry is creating “green jobs” and sending them to other countries. Tax driven relocation.
    My data base showed 135 battery companies near the Mexican border. Most new batter work is imported. Lap top batteries all imported.
    I kinda enjoy seeing the “think tanks” write stories and inflate their assssumptions and work on 8 year old data.

    GLM glasfiber laid off another 60 workers in Arkansas. They really need to move them to mexico because of the evaporation of the catalyst for hardening the plastic. EPA will lean on them unless they go to vac bakking and pre preg which will quadruple the cost.

    Please find me a think tank that is more globally aware for forcasts. These are off the mark.
    Spain is spending 700,000 per “green job” and running a 20% unemployment rate,. They brag about a hiogh speed rail but its loss of revenue and cost in terms of BTU’s per passenger mile are just not very good.

    Ypu’all need more industry contacts and more relevant data.

    saving $3,900 per household is actually after tax loading going to come out more like 3 thousand more per house hold per year. we recently went from 12% of househild income sopent on energy to 20% and now it will soon hit 25%. Healthcare will also go toward 25%. The squeeze is almost here.

    Inflation is coming soon. I also can name the big moves into commodity hedgefunds. We will being borrowing federal money to assist in household energy improvements that will cause inflation and tax increases. As the president of my company I will be paying healthcare for my workers like we have since 1973 and for an equal number of people that are not employed , on welfare or other.

  2. Mark Shapiro says:

    I guess if things are half as bad ad K L Reddington makes them out to be, no one will be able to buy fossil fuels after a couple more weeks or so, and that will stop AGW right there. Pessimists like him and me should buy smaller houses, smaller cars, and fewer toys. That reduces economic and financial risk, and conserves energy, too.

    Meanwhile, I’ll support Waxman-Markey — and anything else that promotes efficiency, clean energy, and conservation — til the cows come home.

    Don’t worry K.L. — you can’t be too green.

  3. MikeB says:

    If all US companies are as dumb as GM, then maybe K L R has a point.

    Low emission high efficiency manufacturing must be something only other countries can achieve.

    Guess we should just give up and buy all our stuff from other countries.

  4. Gail says:

    Here’s an example of the younger (than me) generational perspective:

    How accurate is his analysis? I do not know…

  5. Mark Shapiro says:

    Gail –

    Thanks for the link. The author’s point that Copenhagen’s goals are both inadequate and devilishly hard to achieve is well taken. So here’s a suggestion from a business savvy neighbor: if you want to influence an extremely powerful business, aim right at the top (instead of boycotting the company, for instance). Concentrate your energy on the CEOs. Connect them personally to the problem. Name names.

    I should try to find a link to the study that explains this.

  6. SunMan says:

    K L Reddington offers no proof for his/her assertions, plus repeats numerous debunked projections of your own.

    This type of right-wing thinking claims to not be citizens of the world when it serves their cause, waves the American flag and shout “Patriotism!” when it helps their cause.

    Not only can’t you spell, but your copying and pasting of right-wing talking points is incredibly boorish. Just because somebody says it again and again, does not make it true, including your false assumption by Gabriel Calzada, affiliated with Juan Carlos University regarding the purported cost of green jobs in Spain, along with the fallacious projection of what a false analysis will mean for the U.S.A.

    After being in charge during the largest run-up in energy prices in American history, after being in charge during the largest financial crisis in 70 years, after being in charge during the most militant offensive period in American history, this group of people changes direction.

    What was pro-American is now anti-American. Instead of “buy American” they want America to drop dead.

    What is it with you people, K L Reddington? Do you think we’re so stupid we don’t remember what you said yesterday?

    Let’s get some facts straight:
    1) We import 70% of our oil.
    2) We have 1.5% of world oil reserves.
    3) We (the world) has a serious pollution problem
    4) Existing laws and markets do not take into account the total life cycle costs of fossil energy.
    5) We have been screaming the GOP mantra “drill baby drill” for over 30 years and it simply leads to greater oil company profits, more pollution, and greater dependence on foreign oil.

    The definition of insanity is continuing to do the same thing over and over again and expecting different results.

    I wish the radical right would actually demonstrate patriotism and support America, promote “buy-America” instead of selling anything, anybody, and any shred of moral decency in order to get back in power.

  7. TGood says:

    When people see their electricity costs rise 50-80% (Obama’s estimate), I think the love affair with the liberal march to a central government with all power and resources under their control will end. Unfortunately, it will be too late to turn back the clock. Anything the government controls gets out of control. This “climate” calamity being pushed is nothing more than an orchestrated take over by the Democrats.

  8. Rick Covert says:


    You’d better stop driving a car then. The socialist plot to take control of our roads by way of federal highway funds has succeeded. ;) Better get a bicycle comrad.

  9. SunMan says:

    TGood – you make for an excellent trained elephant, getting excellent scores on memorization and regurgitation. Too bad the anti-science lobby’s symbol isn’t a trained seal, you could clap your flippers on command.

    Don’t forget all the central government’s spending on war. Your view that the government should not provide national security via energy security would naturally lead towards dismantling of the military and replaced with anarchistic local militias.

    We also would need to eliminate all the tax credits, tax breaks, and tax deductions for the fossil fuel industry… who are these commie bastards to let government hand out such things?

    Ditto for the nukes. Let the nuclear industry do their own research and find their own storage solution and pay for their own liability.

    And the dance goes on and on… once again dispelling the broken cliches, dismantling the catch phrases so popular with the anti-science crowd and the head-in-the-sand crowd.

    Good luck with all that.

  10. Colin from Mission B.C. says:

    SunMan Says:
    June 10th, 2009 at 11:38 am

    “Not only can’t you spell, but your [sic] copying and pasting”

    Ahh. Irony. I love it.

  11. Gary says:

    I think people will get a lot that they didn’t bargain for if this goes through. It will eliminate many high paying coal mining and industry jobs, the king that have a decent salary and benefits that can support a family. Supporters point to the “millions of jobs” that will be created by this bill, but no one has said what kind of jobs will be created. I recall when President Clinton claimed credit for the “millions of jobs” he created. Many jobs were in fact created during his administration. The problem was that they were mostly low pay, lousy benefit jobs that you needed to work 3 of them to support a family. I am concerned that this is what will happen if this goes through.

    My other concern is that about all the time and money being being wasted on climate while there are people dying of starvation and disease throughout the world. Granted, we are experiencing a climatic warming trend. However, the earth has been much, much warmer and much , much colder long before there were any people around, much less vehicles or fossil fuels. At different times there were oceans covering the continental interior of North America, continental ice sheets over much of the Northern US, and tropical plant fossils have been found in Antarctica. I can’t believe that people are so conceited as to believe that we have control to the extent that we can “save” or “destroy” our climate. We can reduce our contribution by minimizing waste, i.e. better fuel economy, etc. Our contribution, however, when compared to the CO2 contribution of volcanoes, plant transpiration, and other significant non-human sources, is truly comparable to the proverbial impact of “pissing in the ocean.” This bill is not worth the suffering it will cause, and it will not “save” the earth from a warming trend that is mostly due to a natural cycle.