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MIT and UC-Berkeley Study: Are Energy Efficiency Efforts Making the Grade?
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June 19, 2013

MIT and UC-Berkeley Study: Are Energy Efficiency Efforts Making the Grade?

By Cheryl Kaften
TMCnet Contributor

It sounds like the name of an animated movie, but the content will be strictly for mature and thoughtful audiences.

A bicoastal research program, called The E2e Project, has been collaboratively launched this week on the campuses of the Boston-based Massachusetts Institute of Technology (MIT (News - Alert)) and the University of California at Berkeley (UC-Berkeley). The program’s moniker captures its mission, the researchers say, to find the best way to go from using a large amount of energy (“E”) to a small amount of energy (“e”), by bringing together a range of interdisciplinary experts, from engineers to economists.


Energy efficiency is all the buzz right now, with governments worldwide spending billions to cut emissions, reduce dependence on foreign fuel, and mitigate climate change. But are these programs realizing their potential? Researchers from the MIT Energy Initiative’s (MITEI’s) Center for Energy and Environmental Policy Research (CEEPR) and UC-Berkeley’s Energy Institute at Haas School of Business are determined to find out. 


Image courtesy of the E2e Project 

“Cutting energy has lots of potential to help us save money and fight climate change,” explained Michael Greenstone, MIT’s 3M (News - Alert) Professor of Environmental Economics and a member of MITEI’s Energy Council. “It’s critical to find the local, national and global policies with the biggest bang for the buck to use governments’, industry’s and consumers’ money wisely while slowing climate change,” he told the MIT News.

Greenstone is leading the project with Christopher Knittel, co-director of CEEPR, and Catherine Wolfram, associate professor and co-director of the Energy Institute at Haas.

“When deciding on the best energy measures to implement, decision-makers should compare model predictions to actual consumer behaviors. That’s where this project comes in,” Wolfram said. “The E2e Project is focused on singling out the best products and approaches by using real experiments centered on real buying habits. It will provide valuable guidance to government and industry leaders, as well as consumers.”

The E2e Project seeks to answer questions such as: Are consumers and businesses bypassing profitable opportunities to reduce their energy consumption? What are the most effective ways to encourage individuals and businesses to invest in energy efficiency? Are current energy-efficiency programs providing the most savings?

The project’s first experiments already are underway. For example, the team is tracking consumers’ vehicle purchasing decisions to discover if better information about a car’s fuel economy will influence consumers to buy more fuel-efficient vehicles. If so, emphasizing the calculated fuel savings in the vehicle information presented to consumers may be productive.

Other initial projects include evaluating the Federal Weatherization Assistance Program in order to determine why households invest in energy efficiency and what the returns are on those investments.

The Economics of Energy Efficiency

The group’s motivations for studying energy efficiency are derived, in part, from the McKinsey Curve — a cost curve that shows that abating emissions actually pays for itself.

“Our goal is to better understand what the costs and benefits of energy-efficient investments are — where the low-hanging fruit is, as well as how high that fruit is up the tree,” stated Knittel, MIT's William Barton Rogers Professor of Energy Economics at the MIT Sloan School of Management. “The McKinsey curve would suggest the fruit’s already on the ground. If this is true, we want to figure out why no one is picking it up.”

Former U.S. Secretary of State George P. Shultz, a member of the E2e advisory board, commented, “I like the saying ‘A penny saved is a penny earned,’ which rings true from the standpoint of energy. Energy that is used efficiently not only reduces costs, but is also the cleanest energy around. The E2e Project will allow us to better understand which energy-efficiency programs save the most pennies.”

Shultz is a distinguished fellow at Stanford University’s Hoover Institution, where he leads the Energy Policy Task Force. The board also includes MIT Institute Professor John Deutch, former undersecretary of the Department of Energy; Cass Sunstein, a professor at Harvard Law School and President Obama’s former director of Regulatory Affairs; Susan Tierney, managing principal at Analysis Group and a former Department of Energy official; and Dan Yates, CEO and founder of Opower.

The E2e Project has been funded with a grant from the New York-based Alfred P. Sloan Foundation.




Edited by Alisen Downey


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