The struggle to make money by saving people money

There are plenty of companies looking to save people money while cutting emissions, so why are they meeting so much resistance?

The Australian Alliance to Save Energy’s Summer Study Program draws together an eclectic mix of people, all leaders in the push to reduce carbon emissions by saving people money. There are representatives from government, community groups, heavy industry, global industrial equipment suppliers like Caterpillar and Siemens, and engineering consultants. All of them can tell you a myriad of ways that we carelessly waste energy and how we could readily save money using simple technologies and practices you can buy off the shelf today. These people don’t tend to focus on ‘big bang’, ‘gee whiz’ stuff. Rather they have a keen eye for detail and are adept at picking up on lots of little things that cumulatively can make a major impact on carbon emissions.

Despite being an incredibly diverse group of people they will all agree on three fundamental things that are holding them back from saving us money and helping the environment at the same time:

1)     Energy is such a small part of household and business’ expenditure that we don’t really think too much about how they might be able to use less of it. Consequently it is incredibly difficulty to engage households and businesses to buy products that will ultimately leave them better off.

2)     Many senior members of the public service simply refuse to believe that people wouldn’t take up options that would ultimately leave them financially better off. This is contrary to everything they learnt in economics class and these people didn’t attend any classes in psychology at University. Consequently they resist attempts to implement policies that would guide people to make less wasteful energy choices.  

3)     Politicians broadly understand that people often make poor choices and that there are opportunities to save energy, cut emissions and save money at the same time. But they find it difficult to get enthused about putting money towards supporting a range of little things that look pretty mundane and unimpressive like variable speed drives, gas-engines, light bulbs, and sensors and switches. Energy efficiency doesn’t offer politicians a single, big bang highly visual fix that will resolve all our problems in one go. It’s like they’re the ugly duckling of carbon abatement. It’s far more appealing to support shiny solar panels that are almost magical in transforming sunlight into electricity, or putting on hard hats and fluoro vests to visit a coal-fired power station to talk about carbon capture and storage.

These energy efficiency people are a persistent lot though. In spite of constant knock-backs from customers, powerful segments of the public service and politicians, they know they are onto a good thing and their time will come. They can point at government policies that are proving successful, and feel confident that the proof in the pudding will lead politicians and the public service to become more enthusiastic.

An example is minimum regulatory standards that govern the energy efficiency of a range of products sold in Australia. These are saving us billions of dollars, yet we don’t even perceive this program at work because the products that meet the standard work just as well as inefficient ones, and the cost of appliances is falling, not rising. Also programs that rate the environmental performance of commercial office buildings have opened tenants and therefore building owners to the opportunity to do better on energy efficiency. Property owners that are ahead of the game are busily upgrading their buildings to achieve high star ratings in the interests of attracting and retaining good tenants. Another program that gives them faith is the Energy Efficiency Opportunities program that is leading industry to actually have a much better look at how they use and waste energy.  Industry members are now uncovering staggering savings that the pointy head economists say just shouldn’t exist.

With electricity prices skyrocketing due to a $40 billion dollar spend on networks over the next few years, we really need to start listening more to these people and perhaps a little less to economists who haven’t bothered to learn about human behaviour. 

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