Policy Analysis

Energy Efficiency: No Silver Bullet for Global Warming

October 20, 1999 • Policy Analysis No. 356

Undeterred by the Senate’s refusal to ratify the mandatory reductions of greenhouse gases stipulated under the 1997 Kyoto Protocol, the federal government has plunged ahead with a $1 billion annual program to reduce industrial emissions that may contribute to global warming. The Climate Change Technology Initiative–administered by five separate cabinet departments–employs an amalgam of tax credits, research and development funds, product labeling and public awareness programs, demonstration projects, industry subsidies, and regulatory programs to increase energy efficiency and the economic attractiveness of renewable energy.

The program, however, is little more than a sham. The CCTI is but a repackaging of failed programs that have littered the federal budget for 20 or more years. The program offers misleading and incomplete cost/benefit analyses, is obsessed with remedying market failures that do not in fact exist, projects emission reductions that are wildly implausible, asserts a correlation between energy efficiency and energy consumption that is demonstrably false, proposes counterproductive labeling and product standards, and misleads the public about the ability of such a program–even if it performs as advertised–to measurably affect global temperatures.

The CCTI is built on economic ignorance and political symbolism. Regardless of one’s position on the threat of global climate change, the CCTI is nothing but an empty and expensive political gesture.