Energy efficiency and energy savings are considered to be intrinsically good. Politicians of all stripes sing the praises of less-is-more. Only one problem: this view is simplistic and wrong from the economic point of view.

Energy efficiency is so central to the current energy conversation that to criticize it is to take on the unenviable role of the contrarian or, as some have called me, the curmudgeon. In a recent paper, Roy Cordato of the John Locke Foundation happily takes on the role of critic as he dissects energy efficiency as a policy goal.

Dr. Cordato states in part:

It seems that no matter what governments at any level do, from building buildings to formulating and implementing legislation, “energy efficiency” has to be a consideration…. The problem is that the term, as defined by those who embrace it as a policy guide, is focused strictly on saving energy even if it means sacrificing overall economic efficiency.

Whether it is a new fuel efficiency standard for cars, bans on incandescent light-bulbs, or those commercials touting businesses’ commitment to lowering their carbon footprint, the idea that we can reduce carbon emissions by using energy more efficiently is a mantra of our age.

In fact, energy efficiency is considered to be so important that it is sometimes said to be a “fifth fuel” along with coal, petroleum, nuclear, and “alternative” energy. And who can forget Amory Lovins’s term negawatt in this regard?

But as New Yorker staff writer David Owen details in his new book The Conundrum, the idea that we can reduce our energy use by buying the right products is based on flawed economic reasoning.

Background

Improving efficiency and related conservation are not unique to energy but all resources.…

It is a common refrain in headlines at Joe Romm’s Climate Progress:

• “Koch-Fueled Americans for Prosperity Takes Credit for Bullying GOP Lawmakers Into Climate Denial” (Emilee Piece: December 8, 2011);
• “Koch-Fueled Denial Backfires: Independents, Other Republicans Split With Tea-Party Extremists on Global Warming” (Romm: December 2, 2012); and
• “Koch-Fueled Americans for Prosperity Spends $2.4 Million on Solyndra Attack Ad (VIDEO)” (Stephen Lacey: November 28, 2011).

Smearing and innuendo is hardly fair play. But in this case, Joe Romm has something embarrassing to hide. Just as Koch Industries might be his least favorite company, Enron was his darling company.

Specifically, Romm was not only a cheerleader of Enron (Enron is “a company I greatly respect,” Romm would say). He was also an unpaid consultant and collaborator with the infamously fraudulent division, Enron Energy Services (EES), purveyor of energy efficiency service in (gamed) long-term contracts.…

“The oil and natural gas that we rely on for 75 percent of our energy are simply running out.… World oil production can probably keep going up for another 6 or 8 years. But sometime in the 1980’s, it can’t go up any more. Demand will overtake production. We have no choice about that.”

“To some degree, the sacrifices will be painful—but so is any meaningful sacrifice. It will lead to some higher costs and to some greater inconvenience for everyone. But the sacrifices can be gradual, realistic, and they are necessary.”

“We must not be selfish or timid if we hope to have a decent world for our children and our grandchildren.”

– Jimmy Carter, Energy Address to the Nation, April 18, 1977

Will Obama and his ilk learn the lessons of history?…