The National EERS as an Energy Productivity Tool February 2009

White Paper


There is a huge potential for cost-effective investments in energy efficiency throughout all sectors of the U.S. economy: on the order of 45 to 50 billion barrels of oil equivalent between now and 2030. This is about 2.5 times bigger than what some have suggested might be available from off-shore drilling in U.S. coastal waters (Laitner 2009). That magnitude of further gains in energy efficiency could generate a significant downward pressure on oil prices, and increase both the resilience and robustness of the American and the international economies - if we choose to encourage those more productive investments.

Policy solutions will play a pivotal role in strengthening the continued development, dissemination, and widespread adoption of energy-efficient technologies and systems within the U.S. economy (Brown and Chandler 2008; see also Geller et al. 2006). With a focus on the nation's natural gas and electric utilities, this article highlights the potential impacts that might emerge from the adoption of a national energy efficiency resource standard, or EERS, as an extension of state-implemented efficiency standards. We begin with a review of what an energy efficiency resource standard actually is. We provide an overview of how an EERS is now being implemented by the various states within the U.S. We then describe how a federal EERS might complement the existing state actions. We also characterize the cost-effectiveness of a proposed federal EERS. Next we describe the likely macroeconomic benefits that might emerge at the national level from the resulting productivity investments. These larger economy-wide impacts are evaluated using the DEEPER modeling framework (Laitner and Knight 2009).

Finally we explore the larger efficiency potential that might be possible through the development of complementary policies, and we then offer some conclusions based on our assessment.