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Understanding the Policy

Climate change, renewable energy, energy efficiency – many different policy options can help us head off the worst effects of global warming. Americans can make a powerful shift toward using energy resources more wisely and reducing overall energy consumption.
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From small town city councils to the federal government, all decisionmakers have a role to play in shaping energy policy – especially energy-efficiency.

  • Federal Standards.
    The EnergyStar program establishes federal standards for energy-efficient appliances and homes. In 2006, it helped Americans save more than $14 billion on their utility bills, as well as eliminating greenhouse gas emissions equivalent to 25 million cars.

    CAFE standards are fuel-efficiency standards for vehicles. Currently, the U.S. Congress is reviewing whether to raise standards for all cars, trucks and SUVs to 35 miles per gallon by 2020.

    (Also see our section on understanding the policy of climate change.) 
  • State Initiatives. To check out initiatives in your state and surrounding states, check out the DSIRE database, as well as their Glossary.
    Net metering. If a farmer or homeowner decides to install grid-tied solar or wind power system, net metering allows them to sell the excess power back to their utility through the meter on their property. Only thirteen states do not allow net metering, and that includes Kansas.

    Public Benefit Funds (PBFs). Governments set up PBFs to provide low-interest loans for helping citizens and businesses developing renewable energy and making energy efficiency upgrades. Once funded, PBFs finance themselves because the loans are being repaid.

    PBFs support a variety of projects – energy upgrades for farms, commercial buildings, public buildings, and nonprofits; purchase of EnergyStar appliances (often financed through utilities); weatherization projects for low-income housing, etc.

    Tax credits. Many states have creatively used tax credits to jumpstart their new energy economy – for example, property and sales tax exemptions for wind and solar installations; short-term sales tax holidays for purchases of EnergyStar appliances, air conditioners, and furnaces, etc.

    Decoupling. Decoupling requires the action of a state corporation commission to break the link between utilities’ profits and their sale of energy. Under most states’ laws, the only way that utilities can legally make profits for shareholders is to sell more and more energy. This does not provide any incentive for utilities to help their consumers use energy more efficiently.

    When a state passes decoupling, it must then establish an alternative structure for utilities to make a profit. Ideally it allows utilities to profit from pursuing aggressive energy efficiency strategies. For example, utilities can encourage the use of programmable thermostats, CFL lightbulbs, smart metering, etc.

    Workforce Development. The most effective way to increase energy efficiency is to educate the entire supply chain, from producer to retailer to installer to consumer. States can support vocational training for contractors and installers, as well as offer tax incentives for retailers and wholesalers.
  • Local and State Building Codes. Energy efficient buildings – home or commercial – have a high return on investment, and raise a community’s quality of life.

    Strong, enforceable local and state building codes are crucial in maximizing energy efficiency. (Understanding LEED standards is a great place to start.)

    According to the EPA, if the energy efficiency of commercial and industrial buildings alone improved by 10 percent, Americans would save about $20 billion and reduce greenhouse gas emissions equal to the emissions from almost 30 million vehicles.
Want to Know More? Read up on climate change policy and energy efficiency.
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Are you a crazy driver? Speeding, accelerating quickly, and heavy braking can cut your mileage up to 33 percent. At today’s high gas prices, that’s more than an extra 73 cents per gallon.
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