McKinsey report: U.S. energy conservation could save $1.2 trillion
Jul 30th 2009 12:30PM
Updated Dec 4th 2009 6:57PM
A new report out from the powerhouse consultancy McKinsey & Co. concludes energy efficiency is the easiest way to reduce greenhouse gas emissions and save money. Though this is old news, it may be the most comprehensive report to date on the subject, a hefty 165-page tome that you can download here. The numbers tossed around in this research are staggering.
The authors estimate the U.S. could save roughly $1.2 trillion in energy costs through 2020 based on a $520 billion investment in efficiency measures. If executed properly, this massive efficiency augmentation campaign would reduce U.S. energy consumption by 9.1 quadrillion BTUs (British thermal units) or by about 23 percent of projected demand. The enhanced efficiency could prevent up to 1.1 gigatons of greenhouse gases from floating aloft each year. Trillions, quadrillions and gigatons.
Ironically, the report says, a significant percentage of the savings would come from very simple efficiency measures, such as beefing up insulation on homes to prevent air leakage. About 35 percent of the savings could come from residences with 40 percent coming from industrial uses and 25 percent from commercial uses. The report also recommends the formation of a national policy designed to encourage and, possibly, subsidize efficiency measures.
The report underscores what many energy experts have long been saying -- that the cheapest way to save energy is to use less of it. Their voices, however, have taken a back seat in policy to more grandiose initiatives that, inevitably, have turned out to be at least partly problematic. The rush to build out the U.S. ethanol supply system ignored the growing U.S. water shortage and the insatiable thirst of ethanol refineries. The rush to throw up solar panels has ignored questions about end-of-life disposal of toxic metals such as Cadmium Telluride. This heavy metal is used in popular thin-film photovoltaic arrays.
Alex Salkever is a senior writer at AOL DailyFinance covering green tech and technology topics.