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Putting Conservatism Back into Conservation

May 22, 2007

Mention the term "energy conservation," and too often, the mental image that arises is that of a scowling Jimmy Carter bundled in a cardigan sweater and telling us to eat our peas.

An unfortunate consequence of that unfortunate connotation is that too many conservatives associate energy conservation with a finger-shaking nanny-state determined to dictate how Americans should conduct their lives. Somehow, conservation has become "liberal" and self-indulgent consumption has become "conservative."

As energy security and the dangers of global warming converge into a broad strategic challenge, it’s time to restore the conservative pedigree to conservation and think about it as a businesslike tool for the conservative goal of getting more value out of a limited resource.

The McKinsey Global Institute, a think tank within the McKinsey consulting corporation, has published a couple of helpful reports that shed light on the topic. The bottom line is that there are enormous opportunities for squeezing more work out of lazy Btu’s. And none too soon, because energy demand is expected to pick up speed between now and 2020, partly as a result of growth in developing nations.

The total potential for increasing energy productivity worldwide: 150 quadrillion Btu’s. That’s a hard number to wrap one’s mind around. To put it into perspective, 150 "quads" is about one and a half times the energy consumed every year by the United States -- every building, every car, and every machine, from the smallest electric toothbrush in Rhode Island to the largest refinery in Texas.

Tapping that potential could lower projected global energy demand 15 to 25 percent by 2020.

But it won’t be easy, or otherwise it would have been accomplished by now. Many barriers impede acquisition of efficiency savings -- information gaps, lack of capital, and poor price signals, for example.

As a result of those stubborn barriers, markets left to their own devices will leave all those efficiency savings on the table. McKinsey recommends overcoming them with tougher efficiency standards for lighting, appliances, and buildings.

For example, the second of the McKinsey reports, released a week ago, estimates that stronger efficiency standards could lower energy consumption in American homes more than a third by 2020.

Efficiency standards are not the whole answer. Markets won’t drive down carbon emissions substantially until carbon disposal carries a cost, imposed through a cap-and-trade policy or a tax.

But the McKinsey work shows that a generation after Jimmy Carter and his cardigan sweaters, the American energy economy remains way too casual about waste. As the dangers of oil dependence and global warming become increasingly apparent, such behavior is wholly inconsistent with the cardinal conservative virtue of prudence.