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Climate Legislation: Catalyst for Energy Efficiency

In the business world, discussions over the proposed climate and energy bill now before the Senate focus on cap-and-trade, the mechanism by which power companies will be rewarded for producing more energy through solar and wind sources and discouraged from continuing to use coal and other sources that release carbon dioxide and other greenhouse gases into the air.Corporate supporters of the American Clean Energy and Security Act believe the establishment of a market for renewable energy credits is necessary to address the threat of climate change and to avoid other problems associated with oil and coal. Critics say it will drive up electric rates as power companies pass through the increased cost of generating renewable energy to their customers.But this debate on one aspect of the bill ignores its overarching intent and misses a big opportunity that ACES presents to U.S. businesses. If the bill is about promoting renewable energy, it is even more about catalyzing energy efficiency, a goal likely to save companies far more money than cap-and-trade will cost them. If ACES makes a kilowatt-hour cost more, it also offers ways for companies to use fewer of them. So, while electricity rates may increase modestly, the actual bills that businesses pay will go down. For most companies outside the manufacturing sector, the majority of electricity used comes from the facilities they own and lease: heating, ventilation, air conditioning, lighting, computers and other machines in buildings are collectively responsible for nearly 40 percent of all energy use and a similar percentage of total greenhouse gas emissions in the United States. In some U.S. cities, buildings are responsible for three-quarters of all emissions.Energy use can be significantly reduced in commercial buildings with little or no upfront cost. Simple things like turning lights off at night can save 10 percent or more. Professional building managers can save another 10 to 15 percent by tweaking HVAC systems.Even greater reductions are possible for owners who can spend the money. New York’s Empire State Building, for example, recently embarked on a $20 million energy retrofit that will pay for itself within a few years. A team led by Jones Lang LaSalle determined that the retrofit will reduce the building’s carbon dioxide emissions by 105,000 metric tons over 15 years, equivalent to the annual emissions of 17,500 cars.When the work is done, the 102-story art deco skyscraper will be more energy efficient than 90 percent of all office buildings, using half the energy per square foot of an average building. Consider the huge reductions in carbon dioxide, not to mention the enormous cost savings, if owners of the tens of thousands of other large buildings around the country would invest the time and money to maximize efficiency.

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