Saturday, December 01, 2007

"Money for Nothing"

The New York Times has an article by Matthew Wald about a recently published report by the McKinsey Consulting firm that says that the U.S. could reduce it's carbon emissions using technologies that have been around for 20 years.

One of my favorite quotes from the executive summary is that:

Almost 40 percent of the abatement could be achieved at "negative" marginal costs, meaning that investing in these options would generate positive economic returns over their lifecycle.

Money for nothing, what's not to like. It gets even better in that these changes do not require substantial lifestyle changes. However barriers remain, most of the reason these technologies are not used is that incentives are misaligned in the form that structural costs are borne by the builder, while the cost is borne by the occupier. Aligning these or mandating through codes would redistribute the costs.

We tend to decry regulation in America, and I'm not a big person for government intrusion, but I do believe in rules that level the playing field and remove the "free rider" problem. Everytime someone proposes banning something, industry goes you'll destroy the industry. It happened with unleaded gasoline (a move that some researchers claim is responsible for a 10 point gain in IQ), or in the TV world the mandated support for closed captioning or the v-chip. All these industries survived.

Energy efficiency is good business. Duh!


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