Energy Efficiency Forum 2010: Finding the Formula for Progress

By Annie Snider
Published June 16, 2010

On the heels of President Obama’s Oval Office speech marrying the BP oil spill with American’s fossil fuel dependency, energy cognoscenti gathered in Washington Wednesday to discuss the state of play on the most near-term, cost-effective step the country can take to cut that dependence -- energy efficiency.

Efficiency has been the “duh” of the energy world for decades. Yet, despite the fact that many investments in improved efficiency pay for themselves in just a few years, and even with a handful of federal and regional incentive programs and public education campaigns in place, there remains tremendous unrealized potential.

“Energy efficiency is the fifth fuel,” said retired Senator Timothy Wirth, who was a key author of the 1990 cap-and-trade program for sulfur dioxide and is now president of the United Nations Foundation and Better World Fund. “Efficiency is one of the things that unites people and that we can and must get done now.”

The conversation at the 21st annual Energy Efficiency Forum centered on two key ways of seizing the potential of efficiency: government leadership and behavioral science.

“This is a new Sputnik moment -- not only because of what’s happening in the Gulf, but because of what’s happening in China,” said Rep. Steve Israel, D-N.Y. His call for an ambitious presidential vision akin to President John Kennedy’s 10-year plan to put a man on the moon was a refrain among both political and industry leaders.

“We’ve had 30 years of half-steps, back-steps, missteps, no steps,” Israel said. “In that time we’ve doubled oil imports and slashed the R&D budget by 87 percent.”

Aside from the kickstart that an ambitious national goal could give the field, financing remained the focus of proposed federal programs.

Israel, a former member of the House Armed Services Committee who casts clean energy squarely as an issue of national security, is a proponent of PACE (Property Assessed Clean Energy) bonds. The program, which would finance the upfront cost of efficiency measures in commercial and residential property through an annual assessment on the property tax bill, is part of the House-passed climate bill. Israel says PACE bonds would fill in what he calls “the three missing words” -- return on investment.

Meanwhile, Senator Jeff Merkley, D-Ore., who rolled out a report with the American Council for an Energy Efficient Economy on Tuesday calling for increased efficiency measures in pending energy legislation, emphasized the importance of low-cost loans and grants.

“If I can pay off the cost of new (efficient) windows with savings from my energy bill, then it’s truly a win-win,” Merkley said.

But economics are not enough, according to Robert Cialdini, a Ph.D. social scientist who specializes on consumer energy choices.

He did a three-year study in which a door tag encouraging energy conservation was placed on the front knobs of 1,000 Californians’ homes encouraging them to conserve energy.

Some of the tags emphasized the environmental benefit of conservation, others exhorted homeowners to think about future generations, another group laid out the potential to reduce power bills, a fourth set simply told homeowners that most of their neighbors were taking conservations measures, and a fifth, control tag encouraged energy savings without making a case for why.

What did Cialdini find?

“We found that just exhorting people to save energy was the same as doing nothing at all,” he said. The environmental, ethical and economic arguments prompted a small savings. But positioning energy conservation as the social norm was the clincher -- it snagged energy savings three times the size.

“People follow the lead. They want to know what people as similar as possible to them are doing,” Cialdini explained. “We think, ‘If people like me are doing it, then it’s probably the thing to do.’”

Capitalizing on the potential of the efficiency piece of the energy puzzle will take a combination of behavior change, improved business models and new technology (more on the technology piece in an upcoming post). It may sound like an enigmatic formula today, but more than one speaker drew a parallel to the speed with which cell phones penetrated the market. In 1990, few would have dreamed that the high-priced brick would become the pocket-computer necessity that it is to many today.

“We have too many companies, too many investors sitting on the sidelines now,” Commerce Secretary Gary Locke, recently returned from a clean energy trade mission to China and Indonesia told the forum. “Our challenge is to write a different story.”

Annie Snider is an environment reporter based in Washington, D.C. You can follow her on Twitter @AnnElizabeth18.