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Increased Efficiency - Caveat Emptor

Conventional wisdom holds that increasing home energy efficiency is the cheapest, fastest and cleanest way to fight climate change by reducing carbon dioxide emssions. Moreover, it saves the homeowners money. A classic win-win.

Not so fast… My local newspaper reported on a recent University of Chicago study “which used data from a random sample of 30,000 low-income Michigan households that were eligible for an Energy Department home weatherization program.” The study “found that the projected energy savings were 2.5 times greater than actual savings. As a result energy bills didn’t decline nearly enough to eventually pay for the initial cost of the upgrades.” A second study of middle-class homes in Wisconsin produced a similar result.

But at least the homes used somewhat less energy, which is a good thing - right? However, the researchers concluded that this program cost $329 for each ton of carbon dioxide saved, while the government estimates the social cost of a ton of CO2 is only $38.

I shouldn’t have been surprised by this. Why should programs which purport to aid the environment by increasing efficiency be exempt from the advertising shinangins that pervade our economic system? In fact, regardless of whether these two studies can be replicated elsewhere, shouldn’t we expect exaggerated claims from promoters who will profit from their implementation?

In this instance, the government is using tax-payer money to pay contractors to put in new windows, furnaces, appliances, etc. at reduced cost to the homeowner, but at almost ten times the expense of the actual carbon cost savings to our society. I’m sure those selling and installing the products in question aren’t complaining.

Those of us who watch television see inflated claims for an wide variety of products in commercials every day. The United States Supreme Court ruled in the 19th century that such advertising wasn’t lying, but “mere puffery,” and it is settled law that there is nothing illegal about it.

This is the busniss plan of those touting the green capitalist solution to global warming produced climate change. They will attempt to sell schemes to stimulate economic activity that they say will be environmentally beneficial. I’m not saying there are no honest contractors or non-profit organizations that are doing their best to make a positive difference. But within the context of our system, whenever there is money to be made, any field will tend to be dominated by those businesses that most aggressively find ways to increase profits and advertizing to gain market share. Green capitalism still means profit first, green second.

The green-conscious amongst may let down our guard because we want these programs to work. But it is advisable to follow the latin catch-phrase, in this instance, as in all others.

Caveat emptor, let the buyer beware.  Read More 
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