The energy crises of the 1970s spurred the federal government, and some state governments, to mount a variety of energy policies to address concerns about oil import dependence, high energy prices, and overall energy security. Since then, additional economic and environmental concerns—especially international competitiveness, air pollution, and climate change—have also driven policy proposals to support efficiency.
As the nation seeks to reduce imported energy and to increase
production from “clean” domestic sources, there may continue to be
interest in additional federal spending, tax incentives, and regulatory
measures to further help overcome market barriers to
efficiency measures. Also, any future efforts to create a cap and trade
program for greenhouse gas emissions could include auctions of emission
credits to generate revenue that could, in part, be used to fund energy
Although energy efficiency measures may often be less costly than new
supply, market barriers often prevent measures from being implemented.
For example, because home builders do not expect to pay the energy
bills, they tend to design building shell features and choose
energy-using equipment based on “first cost” rather than “life cycle”
cost. As a result, new homes may lack operationally cost effective
end-use energy efficiency measures (e.g. thermal windows and a high
efficiency furnace). Also, electric utility companies were designed to
make profits by selling ever-greater amounts of electricity, instead of
providing incentives to customers to reduce demand by improving energy
efficiency. To address such barriers, an array of funding, tax
incentives, and regulations (primarily equipment efficiency standards)
have been enacted to encourage energy efficiency improvements.
Date of Report: January 16, 2013
Number of Pages: 151
Order Number: C12005
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