ACEEE'S GRAPEVINE ONLINE

May 25, 2006

ENERGY EFFICIENCY'S BEST TRICK YET: HOW TO CUT CARBON EMISSIONS AND ENERGY BILLS

ACEEE's new report on energy efficiency's role in the Regional Greenhouse Gas Initiative (RGGI is an eight-state policy commitment to cut carbon emissions by 2019) shows that increasing efficiency investment in the RGGI states is the only way to meet carbon emission targets while cutting customer energy bills at the same time. While it is widely known that efficiency cuts carbon emissions and reduces the cost of compliance with emission reduction regulations, the computer modeling done for RGGI documents in robust fashion the benefits efficiency confers on such cap-and-trade programs. Doubling current energy efficiency impacts would reduce energy prices and carbon prices, and would also reduce the risk of increased emissions in adjoining states. Most important, increased energy efficiency reduces customer energy bills, which otherwise would increase as the cost of carbon allowances raises electricity prices. In the report, ACEEE urges the RGGI states to (1) use a large fraction of emission allowances to support energy efficiency funding, and (2) establish electricity savings targets, such as Connecticut has done, to ensure that the necessary levels of energy savings are realized.

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