Energy Conservation in the U.S.

by Matthew Formby

In response to climate change concerns, national and international efforts to reduce our impact on the environment have been growing for years. Those environmental efforts sometimes include carbon taxes and artificially raised prices, made with the goal of promoting either; reductions in carbon intensity, investments in clean energy, reducing the economic advantage of carbon intense energy, and energy conservation. The problem is that these efforts tend to not only increase costs for carbon intense energy, but all energy for the average person. Energy prices are rising faster than inflation, household income, and our efforts to reduce energy use. The unforeseen cost of some environmental efforts, as valuable and well intended as they are, is a lower quality of life for households.

To begin with, conservation efforts go against an ever growing demand for energy (Graph 1(1)(2)(3)(4)). U.S. energy use has risen similar to population growth, but recently (around 2007) efforts to conserve energy slowed its growth below that of population. The changing correlation seen in Graph 2.3 is a good thing, since without energy conservation efforts one could have expected a much higher growth in energy use. That growth would have meant more greenhouse gasses from coal, petroleum, and even natural gas. But conservation is limited.

Though conservation and the effort to reduce carbon energy are indispensable, they also affect costs. The limitation, then, is how much of this cost can be borne by households. Also, it may seem like great strides are being made since energy use per person dropped almost 60 million British Thermal Units per year from its peak in 1979 by 2014. But total energy use kept rising until 1999, after which it's risen almost as much as it's gone down (Graphs 2 and 2.1).

Conservation is a worthwhile endeavor and attacking the problem (our need for clean energy) directly is the only long term solution, but in the meantime affordability and clean energy need to be considered together.

Everyone personally faces the costs for energy conservation--how much of your budget are you already paying for energy efficiency. According to the Electric Power Monthly report for September by the Energy Information Administration, total residential sale of electricity rose from $156,428 (2005) to $176,707 (2015) in million 2015 dollars (Graph 3.1(6)(7)). In terms of how much each person spends on energy that's a modest rise from about $529 to $543 per month, per person (or about 2.63 times as much for the average

household) (Graph 3.2). But this number still doesn't have context, spending and income are fundamental pair, and U.S. income has been mostly flat since the recession.  "Flat isn't anything to celebrate in the current environment. The 2014 real median income number is 6.5 percent below its 2007, pre-crisis level. It is 7.2 percent below the number in 1999" says Neil Irwin of the New York Times' Upshot(8)

The result, using census income data, is that percent of household income spent on energy rose from 2.4% to 2.7% (Graph 5.2(9)). A portion of that increase is what we pay for increased carbon efficiency and clean energy investments, but this cost only includes how much goes to energy producers not taxes and other energy related costs households pay. Increasing energy costs will ultimately cost families something--not an ephemeral, unknowable thing, but something real and distinct. For some this much of a change in their budget means a harder time meeting basic needs, for most it just means one less luxury or less savings. In either case it means a lower quality of life. It makes sense that energy affordability would be connected to quality of life, since it powers luxuries like television and computers.  But just how related are the two?

To consider the value of conservation and of completely green energy, we need to know just how important energy is. Access to energy affects access both to luxuries, like those above, and necessities like heat and food refrigeration. So it must have some impact on our quality of life, but in developed nations it's difficult to see the effects of small changes in energy affordability and resulting use (Graph 2.1), unlike the clear effect of having or not having any reliable energy. Energy consumption should be a result of rising income, since much of it should be a luxury. Yet, when looking at the two together, they seem completely independent (Graph 4.1(10)(11)) until income is converted into grams of gold (a function of how many grams could be purchased by a household's disposable income during that year) (Graphs 6 and 6.1(12)

). Unexpectedly, not only do the two follow similar trends, but at times changes in energy consumption preceded changes in income. Perhaps more interesting is that it was in recent years that the most significant drop in energy use came before a drop in income. A more thorough analysis of the two, and related factors like employment, commercial vs. household energy use, and so on is needed to draw any conclusions as to why. But what becomes apparent is that the national economy is reliant on energy availability, and to a significant degree. And we have to make just one assumption; that, in a free market, loss of income from a suffering economy ends in a lower quality of life.

The hard truth is that efforts to reduce our impact on the environment won't have just one effect. Presenting the unpleasant choice to either pay the quality of life price of expensive clean energy and conservation, or burn cheap fossil fuels and let the planet pay the price later. This choice is a lie. For renewable energy the solution is far off (about 35 years, according to BP(13)) but nuclear, when done right, can represent the clean, abundant, and affordable energy needed.

Add a comment >>