Why Does Energy Efficiency’s Promise Remain Unfulfilled?

http://e360.yale.edu/feature/why_does_energy_efficiencys_promise_remain_unfulfilled/2367/

Among the many measures the world can take to wean itself off fossil fuels, few match the benefits of making homes, business, and cars more energy-efficient. But financial and psychological barriers have kept individuals, businesses, and governments from realizing efficiency’s great potential.

In 2006, Paul Rak, president of VeriForm Inc, a Canadian steel fabricator, set his company on the kind of do-gooder mission that could have given his corporate accountant fits. Rak had just seen Al Gore’s climate change film,An Inconvenient Truth, his first child had recently been born, and Rak decided he was obliged to find ways to deeply cut his company’s greenhouse gas emissions, even though he knew it was going to cost plenty.

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California became the first state to confront that issue in 1982, when, in the throes of the energy crises of that era, it found a way to decouple profits from the amount of energy used, allowing the utilities to encourage efficiency while guaranteeing a profitable return. Utilities, essentially, were allowed to charge more for each unit of energy, as long as efficiencies improved.

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But, says Elliott, “We’ll start seeing the real benefits when we start putting smart meters on smart homes filled with smart appliances.”

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