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September 16, 2008 / or4green

Investing in Energy Efficiency Standards

The Oct 2008 issue of Consumer Reports (CR) features the article “Energy Star has lost some luster”. Energy Star is a US DOE/EPA standard given to energy efficient appliances. Aside from a brief mention of how Energy Star has prevented large amounts of greenhouse-gas emissions and energy costs, the article is fairly critical of the standard. Energy Star is criticized for being lax, out of date and because companies test their own products. On the first point, Consumer Reports has conducted more stringent tests, on their own or using third-parties, of some of the appliances and found the Energy Star ratings to be overrated in a number of cases.

On the second point, according to the article, leaders of the Energy Star program have admitted that the standard has not kept up with changes in technology. A representative from the nonprofit Natural Resources Defense Council (NRDC) speculates that this is due to lack of staff and lack of willpower. This suggests some solutions, mentioned below. The third criticism is that manufacturers test their own products, with no independent verification, and the program relies on manufacturers to test their competitors’ products to detect any wrongdoing. But there is no evidence that this testing of rivals is occurring. Note, this type of competitor product testing has been studied in the OR literature. I described a paper in which companies monitor the hazardous materials in competitors’ electronics in the post Green Informants.

The Consumer Reports article closes with a slew of recommendations for improving the program from updating the standards, to requiring independent verification, to policing the program. These are all good recommendations, but obviously would all cost money. I would take it a step further and say government and industry should invest more heavily in these programs. The cheapest electric power to be found is not from coal, wind, solar, etc., but from so-called negawatts. These are watts no longer required because of reduction in energy demand and/or energy efficiency improvements. This is one of the key ideas in the book Natural Capitalism by Hawken, Lovins, and Lovins. Along the same lines, that book urges investment in better education of engineers and designers, for the same reasons, such as long-term payoff in terms of energy savings, but others as well that are harder to quantify, such as quality of life of people living in/working in/using their outputs.

Getting back to the CR article, there has been some controversy surrounding it. The EPA fired back with a letter to the editor disputing some of the article’s claims, to which Consumer Reports responded. See this entry in CR’s blog for more.

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