How energy efficiency can deliver equitability

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A just transition entails the equitable distribution of the benefits and, perhaps more importantly, the costs, of economy-wide decarbonisation across the socio-economic, ethno-racial and geographic strata of our current and future society.

Timothy D. Unruh, Executive Director, National Association of Energy Service Companies

Platitudes aside, there’s much to consider. For Americans whose economic wellbeing largely depends on conventional energy production, wind turbines and solar panels evoke fears of employment loss and economic stagnation.

For consumers, particularly those in historically disadvantaged low-income communities and communities of colour, the prospects of potentially increasing prices for electricity and other utilities in the short term, insufficient access to new and increasingly necessary technologies such as EV charging infrastructure – as well as disproportionate exposure to grid reliability issues and climate change-induced weather events – give similar cause for alarm.

There are a range of solutions that policymakers, regulators, energy industry corporates and investors can employ to address equitability challenges presented by the energy transition.

Yet, in my years at the Energy Efficiency and Renewable Energy Office of the US Department of Energy and, more recently, at the National Association of Energy Service Companies (NAESCO), I have developed a keen, well-informed appreciation for the capacity of energy efficiency to address these challenges and facilitate the equitable distribution of the costs and benefits of energy system decarbonisation.

First, let’s look at energy efficiency’s most obvious advantage – cost savings. Investments made since 1980 in energy-efficient appliances, equipment, vehicles, power system infrastructure and buildings are saving US consumers roughly $800 billion in annual energy expenditures. Even still, energy costs, such as electricity and gasoline, comprise a burdensome portion of living expenses for low-income, rural and racial and ethnic minority communities across the US.

A government-backed just transition designed to lessen these ‘energy burdens’, be it through the expansion of existing programmes like the Weatherization Assistance Program (WAP) and ENERGY STAR® or other means, is key to ensuring American consumers are not unnecessarily and unfairly disadvantaged by the increased reliance on electrical energy that ubiquitous end-use electrification – the undisputed keystone of energy system decarbonisation – promises to affect.

For stakeholders on the supply side of the energy system, too, investments in energy efficiency can help achieve a just transition. In 2019, the energy efficiency industry generated more jobs and employed more Americans than any energy sector.

However, over the course of the pandemic, energy efficiency employment suffered the largest contraction of any US clean energy sector. For rural counties, where energy efficiency industries in 2019 employed nearly 60 per cent of clean energy workers, the toll has been particularly acute.

Of course, this is to say nothing of the positive externalities that investments in energy efficiency offer our communities and economy.

A just transition reduces the harmful emissions that disproportionately impact marginalised communities, balances inevitable employment losses with employment gains, improves infrastructural performance and enables more affordable consumption of necessary energy for all and it’s precisely these outcomes for which energy efficiency is well-positioned to deliver.

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