Lately, in the hopes of expanding my mind, I have been listening to podcasts instead of mindlessly listening to my favorite playlists on repeat. While listening to recent episodes of “Freakonomics”, I came across an interesting episode titled “How Efficient is Energy Efficiency?”, which questions the efficiency of energy efficiency policy.
For those of you unfamiliar with the Freakonomics podcast and brand, Freakonomics is the brain child of economist Steven Levitt and journalist Stephen J. Dubner. Based on a series of books by Levitt and Dubner, the Freakonomics podcast explores a range of issues that might not usually be studied using an experimental economist’s perspective. I remember reading the first Freakonomics book, “Freakonomics: A Rogue Economist Explores The Hidden Side of Everything” after it first came out back in 2005. I was amazed at how funny, interesting, and addictive the book was. Since then Levitt and Dubner have put out two additional Freakonomics themed books, “Super Freakonomics: Global Cooling, Economic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance” and “How To Think Like a Freak”. The Freakonimcs radio show/podcast premiered in 2010 and airs biweekly on NPR.
This is not Freakonomics first time addressing environmental issues. In “Superfreakonomics” Levitt and Dubner address the issue of global warming and radical theories on how to address it, and in “How To Think Like A Freak” they discuss the impact of incentives on behavior relating to energy consumption.
In the podcast “How Efficient is Energy Efficiency?”, which came out on February 5, Dubner interviews Arik Levinson, an environmental economist at Georgetown University, who was a Senior Economist with the Council of Economic Advisors under President Obama. Levinson recently published a paper called “How Much Energy Do Building Energy Codes Really Save? Evidence From California”.
In 1978 the State of California enacted the United States’ first Energy Building codes which were projected to reduce residential energy use by 80% . The United States has since centered its environmental policy on emphasizing energy efficiency. In his paper Levinson analyzes the actual efficiency of these codes using a 3 tiered approach and has found that homes built after the codes were put in place do not use less energy than the ones built before.
Levinson questions the popularity of the stated effectiveness of California’s efficiency codes and the sources people use to the evaluate them. The statistics people use to declare the effectiveness of California’s energy code policy actually come from engineer estimates, not practice. It’s crazy to think that we are so many of our environmental policy eggs” in a basket that hasn’t been proven to work.
One of the reasons Levinson gives for the ineffectiveness of the efficiency codes is ‘the rebound effect’. As the housing became more efficient with energy, using energy became cheaper, and therefore homeowners use more of it. I know that I am more likely to use turn on my AC earlier in the season if I know it will be costing me less.
I don’t think Levinson is actually saying that coding policies are bad and need to be gotten rid of. What I think he is saying is that they are not as effective as everyone says they are and we need diversify our environmental policy strategy if we really want to protect the planet.
For a better explanation of Levinson’s findings I suggest you listen to the actual podcast (which addresses additional environmental issues as well) or check out his paper!
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