In 2018, states, cities and companies made progress on energy efficiency, while the federal government took steps backward. This year holds promising opportunities, particularly at the state, city and business level. Unfortunately, we expect a continued need to defend efficiency standards, targets, and funding at the federal level and in a few states.
State highlights of 2018 include major new energy efficiency laws in New Jersey and Virginia as well as new energy savings targets in New York and increased targets in Arkansas. Many of these states will need to develop the details of these policies this year. Additional states will consider new efficiency policies in 2019, driven by new governors and legislatures. Expect actions in Colorado, New Mexico, and Nevada, as well as perhaps Illinois, Maine, and Wisconsin. On the other hand, energy efficiency remains under attack in Ohio and the need for defense there will continue.
At the local level, many cities are stepping up, with 280 pledging “We Are Still In” to the Paris climate agreement targets. Cities are starting to work out the details, such as building benchmarking policies (now enacted in 25 local jurisdictions), expanding access to electric vehicles and public transit, and setting community-wide energy savings or emissions reductions goals. And a few cities are going further. New York City plans to have a new building retrofit law in by Earth Day that would require 20% average energy use reductions in large buildings by 2030, and Washington DC just enacted a law to require retrofits within seven years to all large buildings that are below the median level of performance.
Corporate America is also embracing sustainability. A recent report by the Alliance for Industrial Efficiency of 160 firms involved in manufacturing found that 79% of these firms have set public goals to reduce greenhouse gas emissions and 43% have set public targets to reduce energy use. More broadly, a recent CERES survey of more than 600 US firms that account for about 80% of market capitalization found that 64% have commitments to reduce greenhouse gas emissions, with just over half of these commitments tied to specific timeframes. Together these surveys show much corporate interest, but also a need and opportunity to strengthen efficiency activities at many of these firms. For example, why do under half of firms in the Alliance study have energy saving targets? We also see a need for better data on corporate investments in efficiency. In 2019, ACEEE will be expanding its work on energy efficiency in corporate sustainability, building on a Topic Brief we published in 2018.
Due in part to all of these actions, overall, energy efficiency employment is increasing -- 2.25 million jobs in 2017, up about 133,000 jobs from the prior year (2018 numbers not yet available).
Unfortunately, federal agencies are headed in the opposite direction. They are proposing to halt the increase in federal fuel economy standards for cars and light trucks, roll back the scope of 2020 federal light bulb efficiency standards, and to make it more difficult to set new appliance and equipment efficiency standards. They are also seeking to replace the Clean Power Plan, which would have encouraged more customer energy efficiency, with an Affordable Clean Energy (ACE) plan that is limited to power plant emissions.
So far these are all just proposals, many of them poorly thought out and susceptible to court challenge. For example, the proposal to weaken fuel economy standards is based on faulty analysis, and the lamp standard proposal seeks to get around the federal law preventing backsliding on equipment standards. Final decisions on these rules will be made by federal agencies, and lawsuits will be filed in 2019, but court rulings will likely come in 2020 or even later, making it difficult for companies to plan which vehicles, lamps, and power plants they produce, sell, or procure.
On the other hand, there may be a few legislative opportunities this year at the national level. These include an infrastructure package (which could include improvements to public buildings, the electric grid, broadband, public transit, and EV charging) and perhaps one or more modest energy efficiency bills based on the bipartisan Portman-Shaheen bill, which passed the Senate Energy Committee last Congress.
Finally, major new reports in 2018 warned even more starkly of high costs to the United States and the world from climate change (e.g., costs could be more than $400 billion annually in the US by 2090 – see here), and showed that energy efficiency is ready to make major contributions to slow warming. For example, the International Energy Agency recently estimated that efficiency can produce nearly half of the emissions reductions needed to reach the Paris Agreement target of an 80% cut in global emissions. While the advances in 2018 are not yet of the scale needed to address the challenge or seize the opportunity, many states, cities and companies are showing the way. We hope the federal government will join them.
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