How Efficient Is Energy Efficiency? (Ep. 195)
“One of my jobs,” he says, “was helping the White House evaluate the environmental policies coming out of the Department of Transportation, the Department of Energy, and the Environmental Protection Agency. And I quickly realized that most of the policies that I was seeing involved energy efficiency.”
So Levinson wanted to know: how efficient is all this energy efficiency? That’s the topic of our latest podcast. (You can subscribe to the podcast at iTunes or elsewhere, get the RSS feed, or listen via the media player above. You can also read the transcript, which includes credits for the music you’ll hear in the episode.)
We discuss Levinson’s new working paper “How Much Energy Do Building Energy Codes Really Save? Evidence From California” (and a related Journal of Economic Behavior & Organization paper, called “California Energy Efficiency: Lessons for the Rest of the World, or Not?).
The evidence from California may surprise you: “There is no evidence,” Levinson writes, “that homes constructed since California instituted its building energy codes use less electricity today than homes built before the codes came into effect.”
Along the way, you’ll hear Levinson talk about …
+ Why energy-efficiency mandates “have become the centerpiece of U.S. climate policy.” (It has a lot to do with the Energy Independence and Security Act of 2007.)
+ Why that’s a bummer: “We’re enacting a bunch of policies, patting ourselves on the back for achieving our climate goals, while the Earth continues to warm and carbon emission continue to increase.”
+ Why economists generally don’t think efficiency regulations work so well. (It has a lot to do with the Rebound Effect.)
+ What hardcore environmentalists and climate-change deniers have in common. (“Head-in-the-sand denialism,” Levinson calls it.)
But the core of the podcast is the story Levinson tells about his analysis of the California data. The trigger event was the Warren-Alquist Act, which established the California Energy Commission and gave it the authority to “prescribe, by regulation, lighting, insulation, climate control systems, and other building design and construction standards which increase the efficient use of energy.”
As Levinson notes, “the California Energy Commission projected at the time that homes built after the standards were enacted … would use 80% less energy.” That of course would be a major victory for just about everyone. And it’s a victory that has indeed been claimed by many, including Tom Friedman, writing recently in the N.Y. Times: “New houses in California now use one-fourth of the energy they used 25 years ago.”
But Levinson’s analysis argues otherwise.
Some people are distressed by his conclusion — Hal Harvey, for instance, the CEO of a clean-energy firm called Energy Innovation. In the podcast, you’ll hear a statement Harvey gave us, critiquing Levinson’s methodology and analysis. For what it’s worth, Harvey also suggested to us that “You do not want Freakonomics publishing or promoting this sort of work: It is not sound scholarship, and that could hurt your reputation.”
If my reputation can be hurt by interviewing a prominent environmental economist at Georgetown who worked for the C.E.A., then I guess it’s not worth worrying about.