March 22nd, 2010
(In this piece, reprinted from a collection of essays assembled by the World Economic Forum, a Switzerland-based non-profit commited to improving the state of the world, U.S. Secretary of Energy argues that making buildings energy efficient can rack up substantial energy savings. Chu also discusses why businesses and individuals have previously failed to pick up on this opportunity.)
By Steven Chu
For the next few decades, energy efficiency is one of the lowest cost options for reducing US carbon emissions. Many studies have concluded that energy efficiency can save both energy and money. For example, a recent McKinsey report calculated the potential savings assuming a 7% discount rate, no price on carbon and using only “net present value positive” investments. It found the potential to reduce consumer demand by about 23% by 2020 and reduce GHG emissions by 1.1 gigatons each year — at a net savings of US$ 680 billion.