Economic Message of the Week – Report: Econ Models Sell Efficiency Boost Short

According to a new report by the American Council for an Energy Efficient Economy, adoption of emissions-limiting public policy could cut U.S. energy bills in half by mid-century.

Investments in energy efficiency versus conventional energy use may lead to up to half of the emissions reductions that analysts say are necessary by 2050 in addition to spurring economic growth and job creation.

The report also suggests that many studies on the economic impact of climate legislation rely on models that underestimate the importance of advances in energy efficiency.

Because it is an "invisible energy source," many economic models have ignored the potential gains arising from energy efficiency improvements, according to John Laitner, director of economic and social analysis at ACEEE. "Energy efficiency is the cheapest and largest resource to satisfy the growing demand services in the U.S. economy."

Published: August 5, 2009