When Are Energy-Efficiency Efforts Worth It?

When does “being green” make sense?  Perhaps not as often as you think.

Todd Myers, director of the Center for the Environment at Washington Policy Center, recently noted in a Wall Street Journal article that a “key mistake people make when it comes to energy efficiency is overestimating the benefit of some strategies, spending a dollar to save a dime.” He wrote:

Imagine walking up to someone sitting in a Lexus and offering a $5-an-hour job flipping burgers. How many people do you think would accept? Probably none.

Yet, I often see people waiting at Costco for half an hour to save 10 cents a gallon on gas. Even for the owner of an SUV with a 20-gallon tank the savings amount to two dollars, or just $4 an hour. The burger-flipping job would be a better use of their time!

…[S]ome argue we need so-called green construction standards like LEED. Government mandates, like LEED rules, are very expensive, and even when they do save energy (which they often do not), the savings realized are so small they rarely make sense.

Sometimes energy efficiency projects funded by taxpayers or ratepayers don’t pencil out, either. Here in Oregon, the Oregon Public Utility Commission is considering a request by the Energy Trust of Oregon to allow the Trust to spend ratepayer dollars on certain energy efficiency measures that no longer make financial sense. The Oregonian has correctly noted that if the estimated benefits of such projects are less than costs, we should stop spending ratepayer dollars on the subsidies.

Conservation measures can be justified when estimated benefits exceed costs. But if they don’t, public agencies (and the Oregon legislature) should discontinue “green” projects that cost more than they are worth.


About Kathryn Hickok

Kathryn Hickok is Publications Director, Director of the Children’s Scholarship Fund-Oregon, and Development Coordinator at Cascade Policy Institute, Oregon's free market public policy research organization.
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4 Responses to When Are Energy-Efficiency Efforts Worth It?

  1. Leonard Rydell says:

    One of the benefits of LEED can be creating a better place to live and work. Stores often have increased sales with more light an air.

    Restricting one’s viewpoint to dollars and cents doesn’t always include what is in our long term interest.

    You are correct, it is always cheaper to ignore our impacts on the world around us to save a few bucks, but is that being socially responsible?


    • Neil Huff says:

      I think the socially responsible train has left the station. At least the one that spawned the dozen or so Federally assisted companies that almost immediately went bankrupt after getting the money. The real test for gimmicks and ideas that are supposed to save the planet is the market place.
      If banks are unwilling to risk financing the idea at a time when most of their vaults are stuffed with money and wanting very badly to loan it- then the idea is very likely a loser. So far that has been the situation. As the old saying goes: “Build a better mousetrap and the world will beat a path to your door”.
      Coming up with a genuinely sound idea for helping save our planet isn’t happening. When it does the bankers will be lining up. Those uneconomical wind turbines are a case in point. They look good on paper but in function they are proving costly and unreliable.

      The social responsibility concept in effect means asking people today to sacrifice for the sake of the unborn. This has always been an unpopular idea. Even more so in the face of falling income and the globalization of production and jobs.

  2. Neil Huff says:

    I read an interesting study out of the UK concerning turbine wind power this morning. The study was carried out by the Scientific Alliance and the Adam Smith Institute. Their study concluded that wind turbines on average generate only 8% of generation capacity. The machines are costly, unreliable and woefully inefficient while requiring back-up on the grid by conventional electric generation plants in every case. In a recent trip up and back the Dalles highway where the river gorge is lined with scores of these giant turbines, I noticed that many were not turning at all, while other appeared to be barely revolving. Given that so many (percentage?) of Green projects in which the Govt have invested millions of taxpayer dollars have bankrupted and shut down, the Greens have yet to demonstrate that any of their ideas will significantly reduce our reliance on fossil fuels.

  3. Neil Huff says:

    In the news a couple of days ago is another doleful tale of yet another green project biting the dust. In this case it is a gigantic sun based system of boilers and steam driven turbines this is supposed to supply about 145,000 households with power. It is located somewhere on the Cal/NV border and is huge. Your tax money provided (approximately) 1.2 billion of the over 2.5 billion bucks this Rube Goldberg machine costs. The geniuses involved in this Greendoggle admit there simply are not enough days of sunshine to enable this machine to meet it’s planned power output. Before spending that kind of money on their contraption one would have thought they would measure the annual average days of sunshine for several years before building the thing. That would be long enough to project a clear trend line. To turn the thing on and immediately say we don’t have enough sun power to make it work as planned is so lame it is comical. But they have a solution.. just in case it doesn’t work, it is hooked into a LPG source that will heat the boilers when the sun isn’t cooperative. I feel sure that sometime before Obama leaves office the company that built this thing will go bankrupt and avoid repaying the loan guarantees.

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