Paul Krugman, in his New York Times op-ed column, “Colorless Green Ideas,” uses a surprising example to illustrate the point that energy conservation need not come at the expense of growth.
It’s a widely-held, damaging belief that cutting energy consumption and other carbon emission reduction strategies are a zero sum game, that the money spent to improve the environment will diminish prosperity. But as we recounted earlier, BP spent $20 million to reduce its carbon emissions to its 1990 level, and saved $650 million.
Now things are probably not as rosy as Krugman implies. At some point, it likely will take some belt-tightening, or higher energy prices, to go beyond a certain level of greenhouse gas reduction. But Krugman is right to point out that there are a lot of either pay-for-themselves or low cost measures that can and should be pursued pronto. And his example also shows that higher energy prices aren’t an impediment to growth. We will then have a better idea of how far we have to go with the more difficult, politically contentious initiatives.
From Krugman:
….climate change skeptics seem to be making a seamless transition from denial to fatalism. In the past, they rejected the science. Now, with the scientific evidence pretty much irrefutable, they insist that it doesn’t matter because any serious attempt to curb greenhouse gas emissions is politically and economically impossible.
Behind this claim lies the assumption, explicit or implicit, that any substantial cut in energy use would require a drastic change in the way we live. To be fair, some people in the conservation movement seem to share that assumption.
But the assumption is false. Let me tell you about a real-world counterexample: an advanced economy that has managed to combine rising living standards with a substantial decline in per capita energy consumption, and managed to keep total carbon dioxide emissions more or less flat for two decades, even as both its economy and its population grew rapidly. And it achieved all this without fundamentally changing a lifestyle centered on automobiles and single-family houses.
The name of the economy? California.
There’s nothing heroic about California’s energy policy — but that’s precisely the point. Over the years the state has adopted a series of conservation measures that are anything but splashy. They’re the kind of drab, colorless stuff that excites only real policy wonks. Yet the cumulative effect has been impressive, if still well short of what we really need to do….
People in California have always used a bit less energy than other Americans because of the mild climate. But the difference has grown much larger since the 1970s. Today, the average Californian uses about a third less total energy than the average American, uses less than 60 percent as much electricity, and is responsible for emitting only about 55 percent as much carbon dioxide.
How did the state do it? In some cases conservation was mandated directly, through energy efficiency standards for appliances and rules governing new construction. Also, regulated power companies were given new incentives to promote conservation, via rule changes that “decoupled” their profits from the amount of electricity they sold.
And yes, a variety of state actions had the effect of raising energy prices. In the early 1970s, the price of electricity in California was close to the national average. Today, it’s about 50 percent higher.
Incidentally, since someone is bound to mention it: the California energy crisis of 2000-2001 has nothing to do with this story. That crisis was caused by market manipulation — we’ve got it on tape — made possible by ill-conceived deregulation, not conservation.
Back to California’s success. As the higher price of power indicates, conservation didn’t come free. Still, it’s striking how invisible California’s energy policy remains. It’s easy to see why New York has much lower per capita energy consumption than, say, Georgia: it’s a matter of high-rises versus sprawl, mass transit versus driving alone. It’s less obvious that Los Angeles is a much greener city than Atlanta. But it is.
So is California a role model for climate policy? No and yes. Even if America as a whole had matched California’s conservation efforts, we’d still be emitting about as much carbon dioxide now as we were in 1990. That’s too much.
But California’s experience shows that serious conservation is a lot less disruptive, imposes much less of a burden, than the skeptics would have it. And the fact that a state government, with far more limited powers than those at Washington’s disposal, has been able to achieve so much is a good omen for our ability to do a lot to limit climate change, if and when we find the political will.
