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.
It's important to recognize that the steady population growth above also means a steady growth in demand for almost all commercial goods, and even jobs. It's a force to be considered in any policy or effort like those made to support clean energy. Because it means that, if we can't completely eliminate greenhouse gas emissions, their growth is ensured. Population estimates are always slightly different between sources, so data are primarily taken from the U.S. Census Bureau to keep discrepancies minimal.
To begin with, conservation efforts go against an ever growing demand for energy (Graph 1()()()()). 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.
Even more recently than the change in 2.2, growth in total energy consumption has gone below population growth. Graphs 2().2 and 2.3 indicate significant shifts in energy growth, likely the result of efforts to reduce carbon emissions and environmental impact of energy usage beyond historic measures. Differences in 2.2 and 2.3 also illustrate a very simple principle: Since population steadily increases without any sign of decreasing, national decreases in per-person energy use only help to deter growth in total national energy use (though smaller gains in energy conservation are multiplied by larger populations). Most significantly these elucidate the main limit of energy conservation: total energy use will inevitably grow unless we actually stop using energy (impossible with modern lifestyle and medicine). The need for renewable and long-term clean energy is already great before even thinking about the environment.
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).
Energy use per person is decreasing significantly while national energy use is only making modest changes in its trend.
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()()). 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
Only after years of recession and continued difficulty for households (in 2010 and 2011) did the amount of spending on energy decrease per household. This figure for expenses does not include taxes and other increases on how much energy costs the end-user. Things like carbon taxes primarily target the industry itself, but may occasionally artificially increase energy costs.
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
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Expenses seem low for annual costs: but keep in mind this is per capita and not household/residence. Average people per census defined "household" is 2.63 (U.S. Census Bureau), effectively multiplying this cost by that value. This initially doesn't seem to mean much, energy expenses only have a small spike in 2010, and is only a few dollars. But this can be misleading for two reasons, 1- it divides a household expense by population, 2- the trend doesn't yet take into account disposable income available. This second fact is especially important because that increase happened right as the recession was hitting the hardest.
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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()). 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?
This correlation isn't strong, and yet when historic
income is converted to a valuable commodity likegold in grams, the relation is more noticeable (see Graph 6.1)
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()()) 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()
There is a noticeable correlation between (gold) income and energy use since 1949, but the relationship seems to be even more distinct in the years after 1968. At times changes in income follow, or are followed by, changes in energy use. The proportions of their relationship change over time, but what remains constant is that changes in one see similar changes in the other.
). 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()) but nuclear, when done right, can represent the clean, abundant, and affordable energy needed.
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