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Despite the lack of attention paid to the issue during this year?s presidential campaign (at least, before Sandy came along), Barack Obama?s first term was a bit of a quiet revolution for climate change policy in America. It?s true that within his first two years in the Oval Office, the president had abandoned any efforts at passing a cap-and-trade bill, which went from the policy of choice for both major-party candidates in 2008 to political poison in 2010. But that failure belied a massive shift in energy and climate change policy that Obama was able to accomplish with relatively little fanfare in just his first few months in office. This profound change came in the form of the stimulus bill.
More than 13 percent of the $700 billion American Recovery Act went to energy spending, most of it green. Of the $97 billion spent on renewables, smart-grid infrastructure, fuel efficient vehicles, and the like, the largest portion?$32 billion?went to energy efficiency and retrofitting projects. This was the biggest such investment in the history of history. It may even have finally heralded the arrival of a ?Negawatt Revolution? that noted environmentalist and Rocky Mountain Institute founder Amory Lovins described 23 years ago.
The Negawatt is the general principle of cutting electricity consumption without necessarily reducing energy usage through things like energy efficiency. Lovins first introduced it in the keynote address to the 1989 Green Energy Conference in Montreal:
Imagine being able to save half the electricity for free and still get the same or better services! ? You get the same amount of light as before, with 8 percent as much energy overall?but it looks better and you can see better. ? In the space conditioning case?heating and cooling?you get improved comfort. ... It is doing more with less.
The Negawatt itself is a theoretical unit of power measuring energy saved?Lovins came up with the idea after seeing megawatt misspelled with an n and deciding that this was a potentially useful conceptualization. It sounds self-evident now that you could reduce electricity consumption not by cutting back on energy usage but by improving energy efficiency standards and modernizing antiquated power sources. But the concept was revolutionary at the time. A major problem with getting people to understand the environmental and cost-savings benefits of energy efficiency was a perverse incentives structure that rewarded power companies based on amount of electricity sold, not for how much of a needed service it was providing. Lovins described the dilemma as such:
There isn't any demand for electricity for its own sake. What people want is the services it provides. ? Nonetheless, most of our utilities have gotten into the habit of thinking they're in the kilowatt-hour business, so they should sell more. ? For some reason, it's hard for them to get used to the idea that it's perfectly all right to sell less electricity, and so bring in less revenue, as long as costs go down more than revenues do.
Though Lovins brought the idea to the fore of the environmental policy discussion, he wasn?t the first to articulate the issue: In 1982, California devised an inspired solution, called decoupling, to this problem. The idea was that the state would reverse the incentive structure by establishing the revenue rate that the power company would need to meet in order to return a profit, along with a separate target for electricity production needed. Any revenue over the target amount would be returned to customers, while anything below would be added on to the following year?s bills. This meant that greater efficiency could actually return greater profit.
Decoupling is largely credited with making California the most energy efficient and environmentally friendly state in the country. But a mere disincentive to keep utilities companies from pegging profits to electricity usage was not enough, so the state launched a second program called ?decoupling plus? in 2007 in order to incentivize power companies to lower their electricity production. Through this program, regulators set savings targets, and customers are asked to pay fees to help provide the down payment for power companies to meet these targets. Regulators then calculate long-term economic savings of this efficiency. If the utilities meet or surpass their targeted electricity savings, they get a cut of the projected savings. If they don?t meet the targets, the utilities pay a fine.
Source: http://feeds.slate.com/click.phdo?i=6a892480aefb327fd01a83fd87f0e2f7
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