Trump’s cuts to energy efficiency will cost jobs and taxpayer money, report finds

Researchers also cite sector’s climate benefits in wake of exit from Paris accord.

President Donald Trump has proposed eliminating the Energy Star program. CREDIT: AP Photo/Paul Sakuma
President Donald Trump has proposed eliminating the Energy Star program. CREDIT: AP Photo/Paul Sakuma

Congress should resist President Donald Trump’s plan to eliminate two key energy efficiency programs that have proven to foster job creation and produce significant cost savings, according to a new congressional report.

Democrats on the U.S. Congress Joint Economic Committee studied the energy efficiency sector to determine its impact on economic growth. The researchers found that the two federal programs, Energy Star and the Weatherization Assistance Program, contribute to job growth and make it easier for customers to invest in energy efficiency products and upgrades.

In his fiscal-year 2018 budget proposal, Trump called for the elimination of both Energy Star and the Weatherization Assistance Program. These programs enjoy bipartisan support and provide strong benefits to residential and business customers across the country, especially in rural areas where Trump won the presidency with a large majority of votes.

The staff report, titled “Energy Efficiency Power Economic Opportunities,” says that energy efficiency product and service business owners can expect to see 13 percent job growth in the sector in 2017. Expanding investment in energy efficiency also offers an opportunity to create jobs that are located in both rural and metropolitan areas and that pay above-average wages, according to the report.

“Rather than supporting this trend and ensuring that Americans have the skills necessary to capitalize on this growth, the Trump administration has proposed eliminating successful job-creating programs like Energy Star and the Weatherization Assistance Program,” Sen. Martin Heinrich (D-NM), ranking member of the Joint Economic Committee, said in a statement emailed to ThinkProgress. “Prioritizing the clean energy economy, which includes energy efficiency, is key to America’s global energy leadership.”

The Joint Economic Committee’s primary task is to review the nation’s economic conditions and to recommend improvements in economic policy. Composed of both Senate and House members, leadership on the committee for both the chair and the ranking member alternates between the two chambers every Congress. With Republicans controlling both the Senate and the House, the bicameral panel is currently chaired by a Republican. The committee has 12 Republican members and eight Democrats.

The committee’s Democrats chose to study energy efficiency to determine its role in a future clean energy economy. While conducting their research, the staff also examined the potential climate benefits of energy efficiency technologies, an issue made even more important in the wake of Trump’s announcement last week that he plans to withdraw the United States from the Paris climate agreement.

Along with creating more than 3.3 million jobs over the next 10 years, investing in nationwide energy efficiency upgrades can reduce annual U.S. carbon dioxide emissions by more than 616 million metric tons, or approximately 1.4 billion fewer barrels of oil consumed annually, the researchers found. In 2016, the United States consumed a total of 7.2 billion barrels of petroleum products, according to the U.S. Energy Information Administration. Nearly all of the crude oil that is produced in or imported into the United States is refined into petroleum products such as gasoline, diesel fuel, heating oil, and jet fuel.

Energy efficiency is one of the fastest growing sectors in the clean technology industry. The sector is composed of companies that manufacture Energy Star-certified products and software and service firms that help customers cut energy usage. It also includes companies that construct energy efficient buildings and make upgrades to residential and commercial buildings.

Nearly 2.2 million Americans were employed in the overall energy efficiency sector in 2016, Heinrich said. “This will only continue to grow, creating more jobs and saving consumers trillions of dollars on energy costs,” he predicted.

CREDIT: U.S. Congress Joint Economic Committee, Minority Staff Report, June 2017
CREDIT: U.S. Congress Joint Economic Committee, Minority Staff Report, June 2017

For every $1 million invested, approximately eight full-time jobs in energy efficiency are created, which is nearly three times more than the number of jobs created by $1 million of investment in the fossil fuel sector, the report says.

Energy Star is a joint program of the Environmental Protection Agency and the Department of Energy. The Weatherization Assistance Program is housed in the DOE. Since it became a cabinet level department in 1977, one of the DOE’s top missions has been to promote energy conservation.

Supporters of the Energy Star program cite the high return on investment for taxpayers. Since it was established in the 1990s, the program has saved U.S. consumers roughly $360 billion, mostly in electricity and water costs. The program, jointly run by the Environmental Protection Agency and the Department of Energy, also saved consumers and businesses $31.5 billion in 2014 alone, while costing about $57 million a year. That puts the return on investment for taxpayers at about 550 to 1.

Families participating in the Weatherization Assistance Program have saved more than $3,000 each in energy bills, according to the report. Weatherization upgrades also have large, direct health impacts with the potential to increase social welfare by $2.53 for every dollar invested, it says.

“Congress must invest in projects and research that foster job growth and the expansion of the energy efficiency economy,” the report concludes. “Investments in energy efficiency, in research and development and on-the-ground projects, have shown to be powerful economic engines that can support distressed communities during times of change.”

The researchers highlight other challenges facing the sector, aside from the potential loss of federal funding. A recent survey found about 75 percent of employers working in energy efficiency are having trouble attracting qualified workers for open positions. Providing greater certainty for the future of energy efficiency investments will give businesses and workers the confidence to invest in the skills necessary for careers in this field, according to the report.