April 12, 2010
By Eileen Claussen
This article originally appeared in Reuters.
While policymakers in Washington debate the best path forward for dealing with climate change, a growing number of U.S. businesses have discovered a simple technique that can lower costs, increase productivity, and slash greenhouse gas emissions. What’s more, it can work for any business no matter what they make—whether it’s potato chips or computer chips.
It’s called energy efficiency, and a growing number of U.S. businesses are starting to get it.
What does it mean to be efficient? Seven habits of highly efficient companies as identified in the Pew Center’s new report From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency, lists designating full-time staff to be accountable for energy performance, communicating externally the company’s successes in reducing energy costs and emissions and – perhaps most importantly – integrating sustainability as a core part of corporate strategic planning and risk assessment.
The results of this two-year study, featured this week at our Corporate Energy Efficiency Conference in Chicago attended by 260 representatives from 120 companies and universities, speak for themselves.
Dow Chemical, which purchases as much energy in a year as Australia, estimates that its efficiency efforts have saved the company $8.6 billion since 1994 while avoiding about 86 million tons of carbon dioxide emissions. The retailer Best Buy says that in 2008 its sales of certified ENERGY STAR products saved customers over $90 million in electric bills.
Why are they doing it? For starters, higher and more volatile energy prices.
Energy experts at Toyota think of it as a treasure hunt for low-cost efficiency gains that equate to big cost savings. Like other innovative companies, Toyota empowers its employees to uncover and correct inefficient energy practices at their own plants and, in some cases, for their suppliers. These efforts are in line with Toyota’s goal to reduce energy use per vehicle produced by 30 percent in 2011.
But concern about climate change, and growing customer and employee support for action on energy and environmental issues also matter, according to our corporate energy efficiency report. In many cases, CEOs are personally spearheading efficiency efforts at their companies, reflecting the priority now given to energy saving measures.
“The most inexpensive items are generally improvements in energy efficiency, some of which are economic even without a price on carbon,” said Exelon CEO John Rowe at the conference. Exelon, one of the country’s largest electric utilities, cut energy use at its corporate headquarters by 50 percent by retrofitting it to meet LEED Platinum standards.
The most effective companies are also looking outside their own walls to tap into even greater efficiency opportunities. This means working with suppliers to adopt energy efficient practices, and designing products that allow consumers to share in energy savings.
Earlier this year, Wal-Mart announced a goal to reduce carbon emissions from its global supply chain by 20 million tons, which is the equivalent shuttering six average-sized coal plants or taking 3.8 million cars off the road for a year. United Technologies recently announced a goal to improve the energy efficiency of its products by at least 10 percent by 2010.
Energy efficiency also drives broader innovation, and the benefits go beyond dollars saved and emissions reduced. A focus on energy efficiency can lead to reevaluating business practices, often turning up improvements that increase productivity and enhance quality.
Ambitious energy-savings targets forced Frito Lay to reexamine the way it bakes tortilla chips. By installing new draft controls on ovens that reduced heat loss and evened out heat distribution, the quality of the chips improved. At IBM, a focus on efficiency led to equipment upgrades that reduce energy use and improve reliability in semiconductor manufacturing processes.
It is encouraging to see so many leading companies embrace energy efficiency as a win-win solution. But energy efficiency isn’t just for businesses.
We can all cut energy use, lower greenhouse gas emissions, and save money by taking simple steps like turning off the lights when we leave the room, adding insulation in our homes, and taking shorter showers.
But I’ve been around long enough to know that we can’t rely exclusively on voluntary action to achieve our environmental goals.
We need a comprehensive national clean energy policy that puts a price on carbon. Legislation that establishes such a price would unleash hundreds of millions of investment dollars, deliver an adrenaline shot to our nation’s manufacturing sector, and create thousands of well-paying jobs. Energy efficiency sits atop the list of low-carbon choices poised to deliver immediate results in a clean energy economy.
Leading corporations have shown us what is possible. It is time we follow in their footsteps and embrace energy efficiency as something we can do right now to help create a safer, more prosperous future.
Eileen Claussen is President of the Pew Center on Global Climate Change.
Eileen Claussen is President of the Pew Center on Global Climate Change
On Friday, March 12, we held a briefing on jobs and opportunities in clean energy markets.
Today, the President signed an Executive Order creating an Export Promotion Cabinet of top officials and an Export Promotion Council, a private-sector advisory body. This Executive Order serves to highlight once again how important American exports and competitiveness are to economic recovery and continued US economic strength. While much hand-wringing has occurred over the potential for climate and energy policy to hurt the ability of U.S. firms to compete in international markets, the opportunity of such policy to enhance the competitiveness of U.S. businesses has received less notice. The irony is that even as the planet warms, the United States may be left standing out in the cold if it doesn’t choose to lead in the development of next-generation energy technologies.
February 17, 2010
Contact: Tom Steinfeldt, (703) 516-4146
MARKET-BASED SOLUTIONS CAN GROW U.S. CLEAN ENERGY ECONOMY
Pew Center Briefs Point to Clean Energy Jobs, Detail Carbon Market Oversight
WASHINGTON, D.C. – The Pew Center on Global Climate Change has released two timely publications that make the case for market-based clean energy and climate solutions.
Clean Energy Markets: Jobs and Opportunities, a new brief, explains how investment in clean energy technologies will generate economic growth and create new jobs in the United States and around the world. Comprehensive, market-based national policy that attracts investment in clean energy markets can help create these economic benefits.
A second brief, Carbon Market Design & Oversight, assesses the opportunity now before Congress to create the optimal design and oversight mechanisms to ensure a viable, transparent, and robust carbon market.
“It’s in our economic self-interest to ramp up development and deployment of U.S. clean energy technologies so that we can compete in the rapidly growing global clean energy markets,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “It’s not too late for the U.S. to position itself as a global clean energy leader, but we must act now. Passing comprehensive climate and energy legislation that prices carbon will give businesses the certainty needed to unleash millions of dollars in clean energy investments that will create U.S. jobs and expand economic opportunities.”
Worldwide, clean energy markets are already substantial in scope and growing fast, explains the Clean Energy Markets brief. Historically, regions where an industry gains an initial foothold are more likely to become a major center of growth for the industry. In the United States, comprehensive climate and energy policy can give nascent clean energy industries this initial start by attracting investment in clean energy markets and helping to create homegrown jobs.
In crafting sensible, market-based climate and energy policy, lawmakers should build on best practices and lessons from a number of existing markets to create the optimal carbon market design and oversight mechanisms. The Carbon Market brief provides policymakers a thorough yet concise assessment of the key considerations involved in establishing a sound, transparent U.S. carbon market. These include:
- Roles and rationales of exchange-based and over-the-counter markets;
- Options for improving oversight of these markets;
- Assessments of potential regulatory agencies for a U.S. carbon market; and
- Comparisons of carbon market oversight provisions in legislative proposals.
“Effective carbon market oversight will be critical, but it is fundamental and achievable,” said Claussen.
For more information about global climate change and the activities of the Pew Center, visit www.c2es.org.
The Pew Center was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.
ANCHORAGE - Alaska is a big state, with big mountains, big wildlife, and big development projects. It’s also a place of big changes: the state has warmed more than 4 degrees, creating tremendous pressures on the natural environment and society. But in a place where the people are always looking for the next big economic driver, like a $40 billion Alaska natural gas pipeline, uncertainty about carbon regulation is an Alaska-sized problem.
If you take a look today at page A16 of today's Wall Street Journal, or inside the pages of the Politico, you will find something remarkable. Just a day after some pundits declared that energy and climate legislation could be off the agenda after the Massachusetts election, a diverse group of 88 organizations has come together to say the exact opposite. The message is unambiguous: Democrats, Republicans, and Independents should unite behind bi-partisan, national energy and climate legislation that increases our security, limits emissions, while both preserving and creating jobs.
The Pew Center on Global Climate Change has joined a broad, diverse coalition of 93 organizations, including leading businesses, NGOs, national security experts, veterans' organizations, labor unions, and faith-based groups in an ad calling for Democrats and Republicans to unite behind bi-partisan, national energy and climate legislation that increases our security and limits emissions, as it preserves and creates jobs. These organizations include more than 75 businesses and unions representing over $2.6 trillion in revenue and 11 million American workers.
Click here to download a PDF version of the ad.
A Question of American Leadership
- How will America take back control of its energy future while enhancing our national security?
- When will the U.S. economy regain its competitive edge instead of letting other countries corner the emerging global clean energy market?
- How can we get the U.S. back on track by creating American jobs in the new low-carbon economy?
- How can we protect our natural resources and future generations from climate change?
These are the questions we’re asking our policy makers as America faces a once-in-a-century opportunity to lower greenhouse gas emissions and become the world’s leader in a burgeoning clean energy economy.
We are a broad and diverse group of leading businesses, environmental organizations, national security experts, veterans’ organizations, labor unions and faith-based groups.
We believe it’s time for Democrats and Republicans to unite behind bi-partisan, national energy and climate legislation that increases our security and limits emissions, as it preserves and creates jobs.
It’s a question of American leadership.
Click here to read a related blog post.
Domestically and internationally, climate action in 2009 laid critical groundwork for potential breakthroughs in Congress and global negotiations in 2010. Yet with an issue as complex and political as climate change, turning groundwork into policy is a challenge. 2010 will undoubtedly be a pivotal year for climate change – but first it is instructive to take a look back at what happened in 2009 and how that shaped where we are today.
We captured these highlights in our annual Year-in-Review Newsletter – a useful compilation of 2009’s big climate change stories and related insights. The year’s major domestic action included passage of the landmark House climate and clean energy bill along with numerous Obama administration efforts to improve our climate and economy. These accomplishments included the stimulus bill’s $80 billion in clean energy-related funding and EPA actions, including the endangerment finding, the greenhouse gas reporting rule, and stricter auto-efficiency standards.
Copenhagen consumed international climate attention in 2009, culminating in the pre-dawn hours of December 19 when final touches were put on an accord directly brokered by President Obama and a handful of key developing country leaders. While many questions remain after Copenhagen, our summary of the conference provides a sound starting point for grasping what transpired at the year’s largest climate event.
The lead-up to 2009’s main events required a great deal of work, and some of the year’s highlights include the detailed Blueprint for Climate Action released one year ago this month by the influential business-NGO coalition U.S. Climate Action Partnership (USCAP). More industry leaders also showed support for mandatory climate action by joining our Business Environmental Leadership Council (BELC). And efforts to reach business communities, employees, and families expanded through the Make An Impact program. In partnerships with aluminum manufacturer Alcoa and utility Entergy, we continue to provide individuals with strategies to save energy and money while protecting the environment.
We continued to educate policy makers and opinion leaders, producing reports, analyses, and fact sheets on topics ranging from clean-energy technologies, climate science, competitiveness, and adaptation. Featuring expert insights and thoughtful opinions, we informed broad audiences about the immediate need for climate action. And our timely, relevant work moves forward in 2010 as we seek progress in addressing the most important global issue of our time.
Tom Steinfeldt is Communications Manager
Following the release of its Blueprint for Legislative Action, the U.S. Climate Action Parntership (USCAP) conducted extensive analysis of the economic impacts of climate legislation. The USCAP analysis was conducted using two economic models similar to those employed by the Environmental Protection Agency and the Energy Information Agency in their review of climate legislation. The analysis is primarily based on provisions of the Blueprint but includes H.R. 2454 provisions where the Blueprint does not provide sufficient detail (use of H.R. 2454 provisions in the analysis should not convey official USCAP endorsement of these provisions) .
Key findings include:
- A well designed climate policy is compatible with robust economic growth of about 2.7 percent per year. GDP is projected to increase approximately 70-71 percent between 2010 and 2030, as compared to approximately 71-72 percent in the no-policy case.
- The average annual household cost of implementing the Blueprint, defined as a reduction in real consumption from the no-policy case, is projected to be $57, $89, and $269 in 2015, 2020, and 2030, respectively. All figures are in undiscounted 2005$.
Dow Chemical has saved about $8.6 billion in energy costs since 1994. IBM overachieved on a 3.5 percent annual energy savings target, instead hitting 6.1 percent in 2008, saving millions of dollars in the process. And United Technologies Corporation met an original 25 percent energy efficiency target five years ahead of schedule, reset the target to 40 percent, and blew past it to achieve a 56 percent efficiency improvement by 2006.
How did these companies do it? What lessons can we draw from their extraordinary efforts? Can their successes be replicated across the broader economy?
These questions form the basis of our ongoing research project on corporate energy efficiency strategies. Findings from the study, titled “From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency,” will be released April 6, 2010, at the start of a two-day conference in Chicago. The conference offers an unprecedented opportunity to hear directly from dozens of business executives who have successfully guided their companies to world-class energy savings. Registration is open now; don’t miss the opportunity to sign up for the special early bird rate of $600 for the two-day conference. Keynote speakers and panelists will be announced in the coming weeks. Also check out the conference ad in the Nov. 12 edition of The New York Times.
As President Obama called for U.S. leadership in clean energy technology in a speech at MIT Friday, up on Capitol Hill members of the U.S. Climate Action Partnership (USCAP) demonstrated how they’re already putting innovative ideas into practice.
At a Clean Technology Showcase, we joined six corporations and fellow USCAP members to present cutting-edge solutions to a low-carbon future. While the displays varied from solar shingles to renewably-sourced swimwear to advanced coal technology, all participants agreed that making these solutions mainstream requires enacting comprehensive energy and climate legislation. Economy-wide federal policies that put a price on carbon and deliver incentives for clean energy development and deployment are today’s big missing ingredient.
Instead of the policy talk more common to Capitol Hill, Friday’s event focused on existing and emerging solutions to our energy and climate concerns. It proved an uplifting view of the opportunities that a clean energy economy can deliver.