A watt is a terrible thing to waste

I’m writing this post on my Apple PowerBook G4, which ordinarily does very well what I need it to do—except that right now it is sitting on my lap and giving off enough heat to keep me warm on a cool day.

That might be welcome if today were a February day in Denver. But it’s August.

I’m in the mile-high city where the sun always seems to shine to moderate a discussion on sustainability for Coca Cola Enterprises, the big bottling company; to attend a bunch of events on the environment and energy; and to soak up the atmosphere as the Democrats and thousands of hangers-on here to nominate Barack Obama.

The Coke discussion went well, I thought—participants included the major of Atlanta, Shirley Franklin, who talked about the drought and water conservation, Majority Leader Steny Hoyer who said that a climate-change bill could get enacted in Congress by a year from now, author-consultant Dan Esty of Yale and Joe Nation, a Stanford lecturer, economist and former California legislator who was a leading backer of that state’s revolutionary law to regulate greenhouse gases. Others who I heard or spoke with during my brief visit include Sir Nicholas Stern, the British author of the well-known report forecasting the economic impact of global warming, Carl Pope of the Sierra Club, Dow Chemical CEO Andrew Liveris, former EPA chief Carol Browner, Tim Wirth of the UN Foundation (back in the state that elected him a U.S. Senator) and too many governors, members of Congress and mayors to list. Energy and the environment were very big on the agenda here, if not on prime time TV.

Which brings me back to my laptop. Because while much of the conversation revolved around government policy, and offshore drilling, and the differences between McCain and Obama, I also kept hearing reminders about how much energy we continue to waste in America.

The heat given off by laptops, TVs, DVD players and incandescent light bulbs is wasted energy. So is the AC or heat that escape through the walls and windows of leaky office buildings and homes. Then there’s the gasoline we burn by driving cars that are bigger than we need. The energy wasted in heating and cooling rooms of housings that are too big. And so forth.

The economic and environmental costs of all that waste are substantial. The question is, why do we continue to pay them?

Much as I’m a believer in markets, I’m increasingly coming to think that markets don’t do a very good job of driving efficiency when it comes to energy consumption.

If you doubt it, let me pose a few questions.

1. When you bought (or rented) your home, how important were the insulation, the thickness of the windows and the efficiency of the furnace or refrigerator to your decision? Not very, I’d bet.

2. Is your TV/dvd player/cable box hooked up to a surge protector so you can turn them all off with one click when you are not watching? If not, you are writing a bigger monthly check than necessary for your electricity.

3. And why do so many people continue to buy incandescent bulbs when their lifetime costs are much higher than the costs of CFLs?

One problem here is lack of information—people may not be aware that their electronic appliances consume power even when they are turned off. Or they don’t know the lifecyle costs of different light bulbs.

Another obstacle is that builders, say, who make decisions about insulation or what appliances to install in a new home or apartment have to spend more for efficiency upfront, but the resulting savings go to the buyer of the home.

Still another example: Retrofitting existing office buildings could save an enormous amount of money and generate thousands of so-called green jobs. But getting landlords and tenants and their lenders together to figure out how to do so, who pays and who benefits is enormously complex.

All this would argue for government action—beyond the obvious need to put a price on carbon emissions—to require products to be more efficient. We do that already—there are efficiency standards for air conditioning, appliances and cars—but they are not very stringent, and so we use considerably more energy per capita than Europe or Japan.

You may recall that a very thorough McKinsey & Co. report last year found that about 40% of the reductions in greenhouse gas emissions needed to curb global warming can be achieved through energy-efficiency measures with a reasonable payback time that would save money.

You’d think that rising energy costs would take care of this problem, and they will help, but they are unlikely to work on their own. Consider my laptop—when I bought it, its energy usage never entered my mind, and probably wouldn’t even if electricity cost 25 cents per hwk.

The Sierra Club’s Carl Pope argued that markets sometimes don’t even do their fundamental job of creating products people want. He said an owner of a small business, who needs a truck to haul stuff around and drives 100,000 miles a year, and pays $20,000 or more a year for gas, might want to save money. But how?
“The Ford Econoline van has not been redesigned in 27 years. It gets 13 miles to the gallon,” Pope said. “He’d rather have a more efficient Econoline. It doesn’t exist. It should.”

Then there is the vexing problem of showers. “The average American teenager takes 45 minutes worth of hot showers every day,” said Brian Keane, president of an NGO called SmartPower that promotes clean energy. “That’s an efficiency problem we must address.”

Well, sure—although that may be the one form of waste that neither markets not the government can eliminate.

Tagged as: Coca Cola, energy efficiency, McKinsey, Sierra Club, SmartPower