Whole systems design isn’t about solving one problem. It’s about shifting the underlying strategy and culture to create competitive pressure, emulation, and durable change.

by Alexis Karolides, cross-posted from the Rocky Mountain Institute

Which commercial building sector uses more energy per square foot than all but one other and is more than twice as energy-intensive as office buildings and schools? Grocery stores, second only to food service.

With utility costs rising—and already a significant percentage of the famously thin profit margin on food sales—stores must get serious about energy efficiency, particularly if they care to keep prices low for value-conscious customers.

Now, imagine slashing the energy use of a new or existing store in half, while achieving a better customer environment. How could this be done? Rocky Mountain Institute’s whole-system approach, reaping multiple benefits from single design moves, works particularly well when a retailer is willing to push the boundaries.

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“There is an old joke, widely told among economists, about an economist strolling down the street with a companion when they come upon a $100 bill lying on the ground. As the companion reaches down to pick it up, the economist says ‘Don’t bother — if it were a real $100 bill, someone would have already picked it up’.”

by Ryan Matley, reposted from the Rocky Mountain Institute

President Obama’s call in his State of the Union address to capitalize on “the strongest two-year period of manufacturing growth since the 1990s” by encouraging businesses to bring work back to the United States can be accelerated with energy efficiency innovation.

While Obama urged Congress to take a series of tax steps to encourage businesses to bring jobs back to the United States, RMI has strong evidence that industry can take cost-saving efficiency steps without waiting for policy-makers. Doing so can quantifiably improve U.S. manufacturing’s competitive advantage right now.

Stories about the death of U.S. manufacturing are a recurring theme since the “Japanese invasion” of electronics and autos in the early 1980s, and the sector hemorrhaged 5.5 million jobs over the past decade. But U.S. manufacturing is far from dead, in fact providing a rare bright spot in today’s economy.

Manufacturing employment has grown each of the last two years, driven by a rebounding auto sector, and now employs 11.7 million people.

A number of trends are coinciding to make U.S. manufacturing increasingly competitive globally. Wages and benefits are growing rapidly in China—as Obama noted in his speech—at the same time that U.S. manufacturing wages are falling. The risks of operating a supply chain that stretches halfway around the world are growing: rising transportation costs, the threat of import duties, less product flexibility, slower time to market, intellectual property theft, and product safety/reputation risks are growing concerns when moving manufacturing offshore. All of these factors are translating into making U.S. manufacturing more appealing.

Efficiency and whole-system design can help industry accelerate these growing advantages. Analysis from Reinventing Fire, RMI’s blueprint to running a 158 percent bigger 2050 U.S. economy powered by efficiency and renewables reveals that the industrial sector can achieve 84 percent greater production using 9 to 13 percent less energy, and save $0.5 trillion net.

JR:  That’s a big bill on the ground waiting to be picked up (see also “Energy efficiency is THE core climate solution. Part 1: The biggest low-carbon resource by far”).

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by Alisa Valderrama, cross-posted from NRDC’s Switchboard

An innovative energy-smart finance program for homeowners – called Property Assessed Clean Energy, or PACE – has a chance for revival. Over the next 60 days (until March 26th, 2012), a broad bipartisan coalition of business leaders, environmentalists, property owners and federal, state, and local policymakers will finally have a chance to make their voices heard and explain to federal regulators why PACE makes economic and environmental sense.

The PACE Saga

PACE programs, run by towns or counties, enable property owners to finance the initial cost of energy efficiency improvements or small scale renewable energy projects and pay them off in small increments that are added to property taxes over an extended period of up to 20 years.  Participation in PACE programs is entirely voluntary and from the start, homeowners can save more on their energy bills than the cost of the payments thanks to the clean energy projects. Improvements financeable under PACE can include better insulation, more efficient windows, more efficient heating and cooling systems, and solar panels. (See: Babylon Steps Up the PACE of Green Jobs: “For Energy Savings, Carbon Reduction and Job Creation”).

Because of the economic and environmental benefits PACE could provide, PACE programs were supported by wide range of stakeholders: from labor unions to Fortune 500 companies and environmental groups.  Starting in 2008, over 27 states and the District of Columbia passed PACE enabling legislation and a large number of municipalities in those states started or were preparing to launch PACE programs locally.

However, nearly all existing PACE programs were halted in July 2010, when the Federal Housing Finance Agency (FHFA) and the Office of the Comptroller of the Currency issued instructions to Fannie Mae, Freddie Mac and the national banks that effectively froze PACE financing programs nationwide. The result was millions of dollars in federal stimulus funds in limbo, thousands of jobs implementing the projects left on the drawing board, and economic development plans and climate change goals across the country on hold. Lawsuits and proposed legislation followed, in addition to widespread frustration that the regulators had failed to consider the full range of implications of their actions.  You can read about the status of the lawsuits at my colleague Kit Kennedy’s blog.

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The 23,000 citizens of Bainbridge Island in Washington State are showing how a combination of transparent price signals, online social networking and old fashioned community organizing can make a big difference in reducing energy consumption.

Located in Puget Sound, Bainbridge Island has been a major energy hog — with residents consuming 60% more electricity than the regional utility’s average customer due a large chunk of building stock not being up to modern energy codes.

Residents were offered a choice by the utility: pay for a new substation to support increasing energy demand, or reduce energy consumption. The island chose the latter — and in the process is helping train new workers, save residents money, and illustrate the power of collective action.

Helped by a grant from the Department of Energy’s Better Buildings Neighborhood Program — an initiative created through the stimulus package — island residents have created an online community network for monitoring energy use. In the first winter since the RePower Bainbridge project was rolled out, peak power consumption dropped by 10 megawatts. Over the next few years, the program will also facilitate efficiency upgrades for 4,000 houses and 150 businesses, while training around 65 people.

Watch the video below, produced by Climate Solutions, to see the local action that’s driving change in Bainbridge. You can also check out the Climate Solutions website for more great Solutions Stories.

RePower Bainbridge from Climate Solutions on Vimeo.

How to Help Hard-Hit Communities, the Environment, and Our Economy

by Alon Cohen, Jordan Eizenga, John Griffith, Bracken Hendricks, and Adam James

This piece is a primer for a Center for American report on Rehab to Rent, which can be found here.

Half a million houses, many of them vacant and deteriorating, are languishing in a bloated U.S. real estate market, threatening to turn some cities into ghost towns, undermining the stability of working families, and proving to be an anchor on a shaky economy. Many of these vacant homes, nearly a quarter-million, are controlled by the federal government.

If the situation wasn’t already bleak enough, there are also more than a million additional American homes saddled with delinquent mortgages that are in the process of foreclosure. Chances are many of these homes will also end up as the property of the federal government. The only way to lower the inventory of decaying homes is to find a use for the ones we have before new ones swell the pool. Without assistance, the current “overhang” of foreclosed homes is expected to take four years to work back into the market.

The good news is the Obama administration and independent federal regulators are formulating plans to sell government-controlled foreclosed properties to investors who would bring them onto the rental market. The aim is to reduce the number of vacant homes which depress housing prices and burden the economy while meeting an increasing demand for rental homes. If made affordable these new rentals can help meet the needs of approximately 100 million American households—about half of all renters—who are “rent impoverished” today, meaning they devote more than a third of their monthly income just to housing. This is a key indicator of pent-up demand for new rental housing.

The Federal Housing Administration, or FHA, and the two mortgage giants Fannie Mae and Freddie Mac—both currently in government conservatorship—collectively own about 230,000 foreclosed homes, mostly from mortgages insured or securitized before the housing bubble burst. Unfortunately, only a small subset of these foreclosed properties are in good enough shape and in strong enough markets to be sold directly to families looking for a place to call home. For the rest, low home prices and weak demand for owner-occupied homes mean that selling hundreds of thousands of them into that market will depress prices for a long time to come.

In this paper we lay out a set of priorities for removing a portion of these properties from the glutted for-sale market by converting them to affordable rental units, a process we call “Rehab-to-Rent” or “R2R.”

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The Best “Austerity” is Cutting Energy Costs

by Trevor Winnie, reposted from Clean Edge

A rising attitude of austerity has been sweeping the nation for some time now, with the loudest voices putting near term deficit concerns in front of commitment to long term economic growth. But a temporary spike in government spending might be the most effective way to boost demand for goods, services, and labor in the face of lingering U.S. economic malaise – and at a relatively low cost.

Boosting investment in infrastructure – namely our energy system, telecommunication networks, and roads and rails – has long been the remedy argued for by bright minds like Nobel laureate economists Paul Krugman and Joseph Stiglitz, and Washington Post columnist Ezra Klein.

“Because of the recession, construction materials are cheap. So is labor. And your borrowing costs? They’ve never been lower. That means a dollar of investment today will go much further than it would have five years ago—or than it’s likely to go five years from now,” explained Klein in an October 2010 Newsweek Op-Ed. “So what do you do? If you’re thinking like a CEO, the answer is easy: you invest.”

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CO2 Scorecard Also Calls Out Roger Pielke, Jr. for His Inconsistent Stance on Grey Literature

by Shakeb Afsah, Eric Ness and Kendyl Salcito* in a repost

Summary

This follow-up note on the issue of energy efficiency and energy rebound is structured into three parts. We first discuss the shortcomings in the dataset used by Dr. Saunders for analyzing energy efficiency trend and rebound in thirty industrial sectors. Next we discuss that Breakthrough and the New Yorker’s David Owen have offered no convincing analytical evidence to show that the indirect macro level rebound will offset most of the gains from energy efficiency. Then we discuss how Prof. Pielke Jr has overlooked the use of unpublished grey literature by Breakthrough—an issue for which he has shown zero-tolerance in the case of IPCC.  In conclusion we suggest that there should be a proper discussion to evaluate if Breakthrough should retract or revise its rebound report. Specific issues raised by Breakthrough and Prof. Pielke Jr in their blog and emails are addressed in the appendix.

Until the time Breakthrough and David Owen claims can be validated and peer-reviewed, they cannot be used in any meaningful form in policy discussions.

*We have benefitted from our conversations with Danny Cullenward and Jonathan Koomey of Stanford, and Skip Laitner of ACEEE. All errors and opinion expressed in this note should be attributed only to the authors and the CO2 Scorecard Group.

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America is thinking too small when it comes to energy efficiency … according to a major new report from the American Council for an Energy-Efficient Economy (ACEEE).

The new report outlines three scenarios under which the U.S. could either continue on its current path or cut energy consumption by the year 2050 almost 60 percent, add nearly two million net jobs in 2050, and save energy consumers as much as $400 billion per year (the equivalent of $2600 per household annually).

According to ACEEE, the secret to major economic gains from energy efficiency is a more productive investment pattern of increased investments in energy efficiency, which would allow lower investments in power plants and other supply infrastructure, thereby substantially lowering overall energy expenditures on an economy-wide basis in the residential, commercial, industrial, transportation, and electric power sectors.

“The evidence suggests that without a greater emphasis on the more efficient use of energy resources, there may be as many as three jokers in the deck that will threaten the robustness of our nation’s future economy,” explains John A. “Skip” Laitner, ACEEE’s director of economic and social analysis.

Examples of potential large-scale energy efficiency savings identified by ACEEE include the following:

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Our fact-checking revealed that empirical estimates of energy rebound cited by the Breakthrough Institute are over-estimated or wrong, and they contradict the technological reality of energy efficiency gains observed in many industrial sectors.  For journalists, the Rebound Effect is a trap—it is a man-bites-dog story that never happened.

Energy efficiency policies work, a new study finds, especially when they are broad and deep and sustained, as in the case of California.

by Shakeb Afsah and Kendyl Salcito and Chris Wielga, in a report for CO2 Scorecard

Summary

Energy efficiency is an over-rated policy tool when it comes to cutting energy use and CO2 emissions—that’s the basic message promoted by the US think tank the Breakthrough Institute (BTI), and amplified in major news outlets like the New Yorker and the New York Times. Their logic is that every action to conserve energy through efficient use leads to an opposite reaction to consume more energy—a “rebound” mechanism, which, according to the BTI, can negate as much as 60-100% of saved energy, and in some cases can backfire to increase net energy consumption.

In this research note we refute this policy message and show that the BTI, as well as its champions in the media, have overplayed their hand, supporting their case with anecdotes and analysis that don’t measure up against theory and data….

We provide new statistical evidence to show that energy efficiency policies and programs can reliably cut energy use—a finding that is consistent with the policy stance of leading experts and organizations like the US Energy Information Agency (EIA) and the World Bank. Additionally, we take our policy message one step further—by using new insights from the emerging multi-disciplinary literature on “energy efficiency gap,” we recommend that the world needs more energy efficiency policies and programs to cut greenhouse gases—not less as implied by the BTI and its cohorts in the media.

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Driven by the growing number of energy-efficiency standards in states around the U.S., ratepayer budgets for efficiency programs climbed to record levels in 2011, to $6.8 billion. That’s a 25% increase over 2010 investments, putting the country on track to invest roughly $12 billion by 2020, according to a new report from the Institute for Electric Efficiency.

The figures for energy savings aren’t out for 2011. But the IEE report explains that efficiency efforts saved 112 terawatt-hours of electricity in 2010, which is about the same amount of energy used to power more than 9.7 million homes in the U.S. By comparison, the entire German solar-PV fleet generated 18.6 terawatt-hours in 2011 — roughly six fold less than American energy savings programs.

Those savings were achieved at an average cost of 3.5 cents per kilowatt-hour, making it one of the most competitive resources on the market.

Investments in the U.S. are overwhelmingly being driven by utilities that have requirements for increasing efficiency in their territories through state targets. There are now 26 states with targets in place, and most of them are hitting their goals. A recent report from the American Council on Energy Efficiency Economy found that of the 19 states with targets in place for more than 2 years, 13 have hit 100% of those targets.

And those efficiency investments are helping save ratepayers money. According to a recent analysis of the Regional Greenhouse Gas Initiative, funds raised through carbon auctions in the utility sector and deployed for efficiency and clean energy in the Northeastern U.S. will save ratepayers in the region $1.1 billion over the life of the program, and have already created 16,000 jobs.

Related Posts:

• Broader + Deeper = Greater Savings in Energy Efficiency
• Turbocharging Energy Efficiency 1: Utility Efficiency Program Budgets Double to $5.4 Billion
• Breaking News! Energy Efficiency Programs are Working, Saving Consumers Millions