Wasted Energy: The Price Is Right for Fuel Efficiency to Fall

Article excerpt

WASHINGTON -- When people are rich and fuel is cheap, when the weather is cold and the economy is hot, the United States can hardly resist indulging its appetite for energy.

That was the situation in 1996, when Americans tanked up even more extravagantly than usual. Total energy use grew 3.2 percent, according to the Energy Department, outpacing the nation's economic growth rate of 2.4 percent.

Last year was the first tick upward in five years, a deviation from a long downward trend in energy consumed per dollar of economic production. But while the Energy Department expects improvement in energy efficiency to resume and to prevail for 15 more years or so, the rate of improvement seems to be flattening -- just as nations concerned about global climate changes are pressuring the United States to reduce emissions of carbon dioxide, the greenhouse gas produced by burning fossil fuels. Last week President Clinton proposed a new plan for reducing emissions by offering American businesses incentives to cut them, siding with technological optimists who say Yankee ingenuity can meet the challenge -- perhaps with a subsidy. But others say that to keep the growing U.S. economy from pumping out more carbon dioxide, different incentives are needed. Economic behaviorists say a painful one may be required: higher energy prices. Economic regulators want tighter standards for manufacturers to produce more efficient cars and appliances. The optimists say there are few technical barriers to further gains in efficiency. "The trends are historical, and they don't reflect what the real possibilities are," said Stephen J. DeCanio, an economics professor at the University of California at Santa Barbara who was senior staff economist at the Council of Economic Advisers under President Ronald Reagan. But, he noted, when he and his wife shopped for new lamps, they couldn't find attractive models that took energy-efficient fluorescent bulbs. "Today, two-thirds of the energy used to provide electricity is squandered in waste heat," Clinton said as he proposed to reduce emissions to the 1990 level over the next 10 to 15 years. "We can do much, much better." Clinton's plan relies heavily on narrowly targeted incentives and subsidies for efficiency, and environmentalists and other nations' negotiators in talks on a new greenhouse-gas treaty said it did too little too late. Indeed, the United States, which has 5 percent of the world's population but emits nearly a quarter of its carbon dioxide, is turning in an embarrassing performance as it falls short of earlier goals to cut emissions to 1990 levels by the year 2000. But was 1996's increase a blip on a graph, or a warning of a big problem ahead? Why did the economy suddenly become less efficient in its use of energy? …