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Economic Efficiency, Not 'Energy Efficiency' (Economist Cordato parses a sacred cow)

By <a class="post-author" href="/about#tfisher">Travis Fisher</a> -- July 6, 2012

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 paperRoy 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.