Significant Progress in 2021 but Much More to Do

The recently announced U.S. fuel economy standards aptly illustrate the past year—significant progress but much more to do. In late December, the Environmental Protection Agency (EPA) issued standards requiring cars to average about 40 miles per gallon by model year 2026. While a substantial increase from the approximately 32 mpg standard set by the Trump administration, it is only the beginning of improvements needed to close loopholes and fully decarbonize vehicles in the long term.

Another example is enactment of the federal bipartisan Infrastructure Investment and Jobs Act, which contains many useful provisions, such as investments in low-income weatherization, industrial assessment centers, and electric vehicle charging. It also invests in public transit but fails to invest enough in shared vehicles or bicycle and pedestrian-friendly options.

Unprecedented additional efficiency investments are in the Build Back Better (BBB) bill. The bill was dealt a blow just before Christmas, but discussions continue on salvaging much of it. BBB is a critical component of the U.S. strategy for meeting the United States’ 2030 climate targets. Getting it across the finish line is probably the leading example of “much more to do.”

ACEEE has been heavily involved in both bills. For example, we helped develop single-family and multifamily building energy retrofit programs and tax credits as well as several industrial provisions in the enacted and pending federal bills.

There are many other examples, including several that aim to reduce energy waste in homes and buildings. The Department of Energy (DOE) has proposed to phase out most incandescent light bulbs, which would finally implement a federal law that the Trump administration had blocked. But due to foot-dragging at the Office of Management and Budget, the rule will not be finalized for a few months. Likewise, DOE still needs to undo a Trump administration process rule—a step partially completed in November—before it can revise outdated efficiency standards for more than 25 types of appliances and equipment, including furnaces and water heaters.

DOE also issued a long-overdue draft efficiency standard for manufactured homes, but the proposal is weak for the lowest-income residents. Two other federal agencies—Housing and Urban Development (HUD) and the U.S. Department of Agriculture—have been working to revise out-of-date energy requirements for government-assisted home construction, but they do not expect to issue a proposal until March.

And the federal government appropriated $350 billion for cities and states in the American Rescue Plan Act (ARPA) to help address the impacts of the COVID pandemic. Eligible uses include weatherization and climate change mitigation. States and communities are now developing plans on how to use those funds; ACEEE has identified model programs for them.

States and Cities in 2021

States were very active in 2021. Six states—Maine, Massachusetts, Nevada, Oregon, Rhode Island, and (in December) New Jersey—passed new energy-saving standards for products not covered by federal standards.

Four states—Colorado, Minnesota, Massachusetts, and Illinois—adopted major energy legislation. Colorado adopted the nation’s first requirements for gas utilities to reduce their carbon intensity, with energy efficiency a key strategy. Minnesota updated its energy efficiency programs to better empower and encourage emissions reductions. Massachusetts enacted comprehensive climate legislation that includes a particular focus on environmental justice communities. And Illinois passed comprehensive legislation to reduce greenhouse gas emissions, including provisions to expand energy efficiency and related workforce training efforts. In each state, efforts to implement these new laws are just beginning.

Not all states moved forward, however. In November, with the coldest months of the year looming, New Hampshire took a step that will make it more difficult for residents to save energy. Its Public Service Commission rejected a widely supported proposal to expand energy efficiency programs, deciding instead to scale them back in order to nominally reduce utility rates.

Cities have also been active, with Boston and Denver enacting building energy performance standards. Burlington, Vermont, and Gainesville, Florida, made progress in addressing energy consumption by adopting energy efficiency standards for residential rental housing. The just-published ACEEE City Clean Energy Scorecard documented 177 city actions in the past year. San Francisco—the leading city—updated its energy code for residential and commercial buildings and launched a new program providing home-energy-savings kits to those most burdened by pollution. Madison adopted requirements to install electric vehicle chargers in all multifamily and some commercial buildings.

However, as on the federal and state levels, cities need to do more. The City Scorecard found that city efforts to address transportation energy use and emissions were limited and need much more attention. We also found that cities continue to show limited progress toward their community-wide climate goals and need to increase their focus on creating equity-driven clean energy policies and programs.

This was also a very active year for ACEEE. We published 38 reports, white papers, briefs, and fact sheets and have grown to just over 70 staff.

The Year Ahead

With much uncompleted work, 2022 is likely to be a busy year. A top priority will be efforts to adopt some variation of the Build Back Better bill early in the year. Senator Joe Manchin (D-WV) has signaled support for some climate and other provisions. Still, finding a package on which all Democrats can agree could be difficult.

Federal agencies, localities, and states will need to do a lot of work to implement the already-passed Energy Act of 2020, ARPA, and the infrastructure bill. For example, DOE is planning to add 1,000 staff and contractors to help it implement its portions of the infrastructure bill. ACEEE plans to be heavily involved in assisting these efforts.

As 2022 is a federal election year, we don’t expect much legislation from Congress after the first few months. In addition to the funding bills, the federal focus is likely to turn to regulation, including new EPA clean air rules, tentatively scheduled to be proposed in the summer, and more than two dozen appliance standard revisions to be proposed this year.

The Securities and Exchange Commission plans to issue draft corporate climate disclosure rules early in the year. HUD and other agencies will be revising their building energy code requirements, and work will begin on the next round of fuel economy standards for both heavy-duty and light-duty vehicles as well as improved transportation planning requirements to reduce greenhouse gas emissions.

At the state level, recent laws will need to be implemented and new laws considered. Washington Governor Jay Inslee has proposed a large climate package, substantial climate legislation is being negotiated in Maryland, and Pennsylvania is poised to join the Regional Greenhouse Gas Initiative. Localities will be developing ARPA plans and considering their own legislation, such as pending building energy performance bills in Montgomery County, Maryland.

And while much of the focus of this post has been on policy, individuals and private companies are also taking many actions to improve energy efficiency and reduce emissions. For example, the steel industry is beginning to invest heavily in new steel-making processes with much lower greenhouse gas emissions.

ACEEE’s research finds that energy efficiency can get us halfway to zero carbon by 2050. We made progress in 2021, but we need to make much more this year.