Of course, from a scientific perspective, there is nothing particularly significant about the number 400. But cognitively, round numbers have an ability to attract attention as symbolic –and in this case, unnerving- milestones.

For those of us who aren’t accustomed to thinking in terms of parts per million, it is useful to put this number 400 into perspective. Before the Industrial Revolution, atmospheric carbon dioxide concentrations were approximately 280 ppm. When Dr. Charles David Keeling first set up shop on Mauna Loa to collect the daily measurements that comprise the so-called “Keeling curve” (see below), C02 levels were measuring at 315 ppm. A growing number of scientists and climate experts have identified 350 ppm as the safe upper limit (spurring the creation of 350.org).

Source: http://scrippsco2.ucsd.edu

Perhaps more alarming than the number 400 is the rate at which we got here. Looking at this graph, you can see that atmospheric carbon dioxide concentrations are increasing at an increasing rate. Over the past 10 years, the annual rate of increase in carbon dioxide concentrations has averaged 2.07ppm. This is more than double the rate of increase in the 1960s.

More bad news from the economists…

Climate scientists monitor concentrations of greenhouse gases in the atmosphere in terms of ppm. Economists are more concerned with SCC. The “social cost of carbon” (SCC) measures the present value of the economic damages (in dollar terms) associated with an incremental increase (usually a metric ton) in carbon dioxide emissions in a particular year.

Whereas climate scientists can directly measure concentrations of greenhouse gases in the atmosphere with precise (and really cool) instruments, estimating the SCC is a far more complicated and controversial endeavor. If only we had the equivalent of a non-dispersive infrared instrument to precisely measure the social cost of carbon in the global economy! Instead, economists build integrated assessment models to capture the interactions and feedbacks between the climate system and the economic system. These models (e.g. RICE, FUND, PAGE) are then used to simulate how incremental changes in greenhouse gas emissions affect economic outcomes.

The limitations of these integrated assessment models are well documented. Work to improve and refine these models is ongoing. Importantly, as these models get fine tuned, estimates of the social cost of carbon are being adjusted up.

Take, for example, the influential RICE/DICE models that have figured prominently in SCC calculations. The graph below, taken from a recent paper by William Nordhaus, summarizes how the optimal carbon tax trajectory (a concept closely related to the SCC) has been adjusted as the models are refined.

In 1999, the optimal carbon tax in 2015 was estimated to be in the range of $10 per ton of carbon dioxide. When the model was updated in 2010, the 2015 value increased to $40. The PAGE model provides another important example. When this model was recently updated, the mean SCC estimate increased from $81 to $106.

What is driving these increases? The answer is complicated and involves a host of factors (including how global production is measured, how temperature sensitivities are modeled, assumptions about the effectiveness of adaptation, economic preference parameter choices, etc.). But the punch line is simple: climate change is going to cost more than previously thought. And we should expect to see these upward adjustments continue as researchers account for more of the ways in which climate change damages manifest.

Not all the news is bad

Fortunately, not all trends germane to climate change are moving in the wrong direction. Importantly, whereas estimated costs of emissions are increasing, the costs of some important mitigation measures are coming down. Since 2008, wind turbine prices in the U.S. have fallen by nearly one-third. Reported installed prices of U.S. residential and commercial solar PV have declined 5-7 percent per year between 1998 and 2011. PV system prices fell by more than 26 percent in 2012.

This is not to suggest that steering ourselves onto a more sustainable course will come easy or cheap. It won’t. But as we burn past 400 ppm with no signs of slowing down, the economic case for taking substantive action has never been stronger.

[1] There is still some uncertainty about whether the 400 ppm threshold was actually exceeded. Whereas NOAA revised its reading to 399.89, a second monitoring program run by Scripps Institution of Oceanography read 400.08.

I wanted to understand this better, so I dug into the data. In the figure above, I plotted gasoline consumption per capita against gasoline prices in Latin America. These data come from the World Bank from a survey conducted in November 2010.  Prices include all relevant taxes.

Venezuela is a remarkable outlier. Ecuador and Bolivia also subsidize gasoline, but not to anywhere near the same extent. In fact, most countries in Latin America have substantial taxes on gasoline. Gasoline consumption per capita in Venezuela is 40% higher than any other country in Latin America, and more than three times the regional average.

Venezuela’s high level of gasoline consumption is especially striking given that, according to the World Bank, there are only 147 motor vehicles per 1000 people. Somewhat surprisingly, looking across Latin America there is essentially no correlation between the number of vehicles per capita and gasoline prices. Vehicle ownership seems to be almost entirely driven by income.

So what explains Venezuela’s high level of gasoline consumption? Venezuela has one of the least fuel-efficient vehicle fleets in the world. When oil prices spiked during the 1970s, Venezuelans imported large numbers of low-MPG cars, mostly from the United States, and many of these vehicles continue to be used today. Almost anywhere else in the world, these vehicles would have long ago been retired to scrapyards. But in Venezuela they are cheap to maintain, and very cheap to run thanks to billions of dollars per year in gasoline subsidies.

“We like our cars to be like tanks in this country, meaning they should be huge, comfortable, and preferably manufactured in the United States” – Miguel Delgado as quoted in NYT, December 12, 2010.

For more on Venezuela’s gasoline subsidies, see  here and here.

So, are there steps that governments in the developing world, lending agencies like the IMF or World Bank, or US policymakers (e.g. through offset programs) can take to encourage energy efficiency in the developing world? And, are there lessons we can draw from US energy-efficiency programs? Unfortunately, given the huge energy subsidies in much of the developing world, the lessons from the US are limited.

A Broken Gas Pump in the US, but Venezuelans Get an Even Better Deal

In the US, many policymakers trumpet energy efficiency as one of the most cost-effective carbon-mitigation strategies. McKinsey has famously identified a number of situations where a consumer’s investment in energy efficiency seems to pay off given the savings it would generate at current energy prices. Since consumers appear to be leaving proverbial $20 bills on the sidewalk, some of the current programs to promote energy efficiency involve informing consumers—essentially waving the bills in their faces. For example, the EPA promotes Energy Star labels for efficient appliances and cities like New York and San Francisco now require large commercial building owners to disclose their energy usage.

Better information is unlikely to promote energy efficiency in many parts of the developing world, where current energy prices are seriously out of whack and cover very little of the private costs of energy production (i.e., the costs before accounting for environmental and other externalities).

A recent IMF report documents energy subsidies around the world, and they are staggering, amounting to almost 1 percent of worldwide GDP.

Consider that:

• Residents of Venezuela pay less than 10 cents per gallon of gasoline.
• Nearly 30 percent of the electricity generated in India is not paid for, most of it written off as a “nontechnical loss,” basically a euphemism for theft.
• Residential electricity rates in Mexico cover less than half the estimated costs.

One of the most fundamental tenets of economics holds that when prices are low, consumers will demand more of the good. Chris Knittel has noted this relationship in gasoline consumption across developed economies, where countries with high gasoline prices (driven by high gasoline taxes) consume far less per person than the countries with lower gasoline price. Presumably the usage (after adjusting for lower income levels) would be even higher at low, Venezuelan-style prices.

To help the citizens of the world make efficient choices about energy, it’s important to get the prices right. The IMF report concludes on an optimistic note with case studies of several countries that have reformed their subsidies. But, the recent riots in Indonesia over proposals to remove fuel subsidies highlight just how controversial this task is. In the battle against dangerous climate change, though, we need to pursue all possible tools.

These programs go by different names at different utilities, including SmartRate,  SmartCents, Peak Day Pricing, and Summer Advantage Incentive.  They give you a discount on power most hours of most days, but charge a substantial premium for power on the highest demand days of the summer.  Many utilities now have such programs, though they are not always well advertised or promoted. In nearly all cases for residential customers, they are opt-in, so you have to search them out and figure out how to sign up. I wrote a paper[1] last year that reviewed effective and equitable approaches to implementing opt-in critical peak pricing and estimated the potential impacts on different types of residential customers in the service territories of PG&E and Southern California Edison.

If you are a PG&E customer in the Bay Area (or other milder climate where you don’t have A/C or don’t use it much), their SmartRate will almost surely save you money.  At my house in Orinda (east of Berkeley and somewhat warmer in the summer), we signed up for it last year.  We saved about $40 on electricity, about 13% over the 6 months of the program (May through October). We did avoid running laundry or the dishwasher between 2 PM and 7 PM during the 15 critical peak days that were called, but our adjustments were fairly minor.  If you live in the Bay Area and have not signed up, I urge you to at http://www.pge.com/smartrate.  You can’t really lose during the first year, because the PG&E program has “bill protection,” which guarantees that your electricity bill in your first year on the program will be no higher than it would have been under the standard rate.

PG&E’s program isn’t perfect:

–  I’d like to see them do “shadow billing”, showing on every bill (regardless of which tariff the customer is on) how much the customer paid under the tariff they are on and how much they would have paid if they had switched to an alternative tariff.

–  I would also like to see PG&E get more flexibility from the regulator (the California Public Utilities Commission) on how many critical peak days they can call each year.  A fixed (or maximum) number of calls each summer creates perverse incentives for the utility to call critical peaks on days that are not that hot, or to hold back on hot days in case they run into even hotter days later in the summer.

I discuss these and other issues at greater length in my paper on opt-in critical peak pricing.

Saving money is fine, but the real reason I want you to sign up is to get more direct experiences with critical peak pricing that can shape the way utilities and policymakers design such programs.

If you have already signed up for PG&E’s (or any other utility’s) critical peak pricing program, I welcome your comments about the program.  And if you haven’t signed up yet, particularly if you live in the Bay Area, it is time to start saving money and helping to reduce the stress on the grid during peak times.

Team Auffhammer has invested a lot of money in energy efficiency measures in our home. We have new windows ($$$$), a new roof ($$$), German shutters ($$), more efficient appliances ($$) and LED lighting ($) throughout the house. I have been monitoring our energy consumption after each of these investments and could not detect a structural break in our consumption of electricity or natural gas.

Last September I was at the Apple store and saw they sold a “smart” thermostat called the “NEST”. I checked with a genius (they wear blue shirts) and she said that people liked them and they were easy to install and looked cool. I was sold. I went home. Ripped out our old thermostat and put in the new one. Shiny, cool looking and simple. I then did not program it and let it learn our patterns. The thermostat guesses when you are away (with a minimal number of type I and type II errors). Plus, you can control the thermostat from your phone, tablet or the web. So if you leave for vacation and forget to turn it off, you can do so from the beaches of Maui.

I did not think much was going to happen. Boy was I wrong. The picture below displays our electricity consumption for the past 12 months in green and the previous 12 months in red.

The blue dashed line displays the installation date of our thermostat. This is a highly unscientific difference in difference by picture estimate. By using the previous year’s consumption as my counterfactual this picture suggests that we have consumed 1055 fewer kWhs since last September, which is an average savings of 150 kWhs per month or a 22% decrease in consumption.  Wow!

How much did my new fancy thermostat save me? We actually use(d) a fair number of kWhs which cost $0.29, due to the increasing block rate pricing structure (the more you use the higher the price of the next block of kWh consumed). After spending way too much time with my bills, I figured out that I saved almost $210 since September. If my forecast is right I will have made my money back by the end of the next billing cycle.

Now, I would be an irresponsible social scientist by simply prescribing these fancy $249 thermostats for everyone. The NEST changed our behavior. It brought energy conservation to our attention and each member of the family interacts with this shiny gadget a few times a day. We frequently question whether we really need to turn on the AC or heat. Maybe more importantly this thing is fun to use and looks cool.

Now go outside and do something nice for mother earth. And again tomorrow. And the next day. And the day after……..

And no, this blog post was not sponsored by Nest.

• Last summer, the media ran a blitz of stories about China impeding exports of rare earth metals in order to benefit its domestic industries that use rare earths. The US joined with Japan and the European Union to file a complaint against China’s rare earth export restrictions.

• Six years ago, the US was looking at rapid acceleration of liquefied natural gas imports to satisfy our growing demand for gas-fired generation and industrial natural gas uses.  American diplomats and business people were pushing to open up new sources of LNG imports from South America and the Middle East.

And yet….

with American natural gas production now taking off and prices declining, many domestic businesses and politicians are lobbying to abandon those same principles of free trade. In fact, some of the same companies that just a few years ago were clamoring for LNG import terminals in the US and more LNG trade worldwide are now leading the charge to limit US exports of our newfound natural gas abundance.

Exporting LNG benefits the US economy by selling gas where it can be put to its highest value use and capturing some of that value.  The price of natural gas in Japan – our resource-poor ally and friend — is more than 3 times higher than in the US, and that difference is much greater than the cost of shipping them LNG.  Locking the gas into the US directs it to uses that the advocates admit are only economic when gas is cheap, while the value of that gas is far higher in Japan and other countries that rely on international energy trade to fuel their economies.  When we create value by exporting natural gas, some of the value is captured as profits to domestic producers and some as wages, such as to the workers who build and operate the export facilities and tankers.  But it also boosts the demand for our natural gas, creating additional jobs in gas exploration and production.[1]

The new opponents of free trade in energy — now that we are becoming exporters – are being taken seriously enough that the Department of Energy felt compelled to solicit a study of the economic costs and benefits of exporting natural gas.  Not surprisingly, the study finds that allowing natural gas exports is good for the US economy.

But the narrow economics of exporting LNG is not the strongest argument against restricting natural gas exports.  The pure hypocrisy of such restrictions — after decades of the US arguing for free trade in resources – would undermine any claim that US policy is based on economic principles rather than pure self-interest (albeit misguided).  We are, in fact, still dependent on imports for nearly half the crude oil we use.  That is why the US continues to argue that Venezuela, Saudi Arabia and other oil-rich countries should export more crude and stop using their abundant supplies to maintain artificially low domestic gasoline and diesel prices.

Exporting LNG will benefit the American economy by creating economic value and capturing much of that value in the US.  But just as important, exporting LNG will show that the US energy policies are based on sound economic principles, not the hypocritical politics of cheap energy .

These standards will make cars smaller, lighter, and more fuel-efficient. Will this limit the choices available for consumers? Yes and no. It is going to become more difficult to buy new trucks, SUVs, and minivans. However, because fuel economy standards affect new vehicles only, these larger, fuel-inefficient vehicles are going to continue to be a substantial part of the U.S. vehicle fleet for many years.

Mark Jacobsen (UCSD) and Arthur van Benthem (University of Pennsylvania) are looking closely at the market for used cars and trucks and finding that vehicle scrappage is extremely important. Their complete study will be available soon. In the meantime, they shared with me this figure which shows annual scrap rates by MPG quartile.

As you would expect, older vehicles are scrapped at much higher rates. But what is particularly interesting is the comparison across MPG quartiles. Among vehicles 9+ years old, the least efficient vehicles (Quartile 1) have the lowest scrappage rates, remaining in the vehicle stock long after the smaller, fuel-efficient vehicles (Quartile 4) have been sent to the scrapyard.

Jacobsen and van Benthem find that new fuel economy standards will exacerbate this pattern, leading fuel inefficient vehicles to remain in the vehicle stock even longer. The reason is that tightened fuel economy regulation leads to higher prices for large and fuel-inefficient new vehicles. More people will buy a used SUV or pickup truck instead of a new one. This means that prices of used vehicles increase, giving owners an incentive to postpone the decision to scrap their vehicles. In economics this is known as the Gruenspecht effect, named after a study by Howard Gruenspecht. The original study is available here.

Overall, Jacobsen and van Benthem find that increases in fuel consumption by fuel inefficient used cars will offset about 1/5th of the direct impact of updated fuel economy standards. This Gruenspecht effect is one of the reasons why 92% of economists would prefer a gasoline tax over fuel economy standards. (According to a new study available here, only 22% of non-economists feel the same way.) Whereas standards treat new and used cars differently, a gas tax does not. And a gas tax both encourages consumers to buy more fuel efficient vehicles and encourages them to drive them less.

So, yes, warmer winter weather would be nice. And as it so happens, warmer winters are something we should expect to happen with climate change, so that’s good news. The bad news is that (as economists like to say) there is no free lunch, so climate change will bring us hotter summers too. And as anyone who lived through last summer in Ann Arbor will attest, three months of scorching weather can be pretty unpleasant too.

But does the discomfort associated with a hotter summer actually outweigh the increase in comfort that will come with a warmer winter here in Ann Arbor? And what about the rest of the U.S., some parts of which currently experience very little winter cold (Florida), while others experience very little summer heat (North Dakota)? In a new paper (Climate Amenities, Climate Change, and American Quality of Life), David Albouy, Walter Graf, Hendrik Wolff, and I try to answer these questions by assessing U.S. households’ willingness to pay to avoid hot and cold weather.

How do we come up with an estimate of households’ willingness to pay for climate, in dollars? We take advantage of the fact that local climate is a factor that potentially affects households’ choice of where to live. Compare Berkeley to Ann Arbor, for example. I’ll conjecture that most people think that the climate in Berkeley is superior to that in Ann Arbor–Berkeley has lots of days with warm afternoons and cool, comfortable evenings, while in Ann Arbor such days tend to occur only in the spring and fall. So why don’t people move from Ann Arbor to Berkeley as soon as they have a chance? Well, it costs a lot more to live in Berkeley than it does in Ann Arbor. For the cost of a studio in Berkeley, you can get a pretty nice two bedroom apartment in downtown Ann Arbor. So there’s a tradeoff here–if you live in Berkeley you get beautiful weather, but you have to pay a pile of money in rent (or mortgage payments if you own) to get decent housing, leaving you with less money to spend on other things you want. Thus, the cost of living difference between Berkeley and Ann Arbor reveals something about their residents’ willingness to pay for a comfortable climate.

In the paper, we extend this idea across the U.S. to get at households’ willingness to pay to avoid hot and cold weather. There are, of course, a number of important details that are important to get right along the way–for instance, differences in wages across cities matter too, as do differences in other amenities such as coastlines, mountains, and population density. Our main result is that, on average, households’ willingness to pay to avoid an excessively hot day is greater than the willingness to pay to avoid an excessively cold day. This result comes from the fact that in hot places like the South, the cost of living is quite low relative to wages, indicating that households are willing to pay very little to endure the South’s hot, humid summers. The result also makes (at least to us) a lot of intuitive sense. On a cold day, you can protect yourself outside by layering up with coats, hats, and mittens. On a hot day though, there is unfortunately a limit to how many clothes you can take off (most jurisdictions won’t even legally let you get down to zero), so you’re uncomfortable outside no matter what you do. Sure, you can go inside to your air conditioning, but if you’d rather be outside in the afternoon, there’s a cost to doing so.

What does all this mean for the potential effect of climate change on comfort? If heat is worse than cold on the margin, then the extra discomfort from hotter summers will outweigh the benefits of warmer winters. When we use “business as usual” climate projections for 2100, we find that unless technology or preferences change, the annual net loss of comfort from climate change will be worth between one to three percent of U.S. income. Those numbers might seem big or small to you depending on your perspective, but for reference they’re in the same range as forecasted losses in GDP from damages to market goods such as agricultural products that come from the Nordhaus DICE model and the Stern report.

Perhaps even more interesting than the average welfare loss is the distribution of this welfare loss across the U.S., which we depict in the map above (losses expressed as a percent of 2100 income). As you might expect, the South gets hit fairly hard, since their summers are already hot and their winters are fairly mild–there’s not a lot of scope for climate change to give southern residents benefits in the winter. But most of the North fares quite poorly as well, even in places like North Dakota that currently have harsh winters but mild summers (though they do already experience some pretty hot days). What’s going on there? This is where it’s important to note that not everybody has the same preferences for climate. Some people aren’t bothered that much by cold weather, while others can’t stand it. It turns out that people sort themselves according to these preferences, so that North Dakota is largely populated by people who don’t mind the cold so much, while Florida gets populated by people who strongly dislike the idea of winter. So if you live in North Dakota, the fact that climate change will result in a warmer winter won’t be worth that much to you, but the fact that your relatively mild summer will turn into an extremely hot one will be worth a lot. The take-away message here is that if we want to forecast who will gain and who will lose from climate change, taking regional preferences into account can matter a lot, and it may be that southerners won’t be the only ones to suffer if the latest climate projections are realized.

In this post, I provide some promised extensions, and address several issues and suggestions that were raised in the (generous and voluminous!) comments.

Recall that the company is trying to forecast what my family’s savings will be in the future if we spend $12,400 for their panels. Forecasting is a tricky business, but we do it when we make many investments, whether it’s buying stock in the hopes of reaping future dividends and capital gains or buying a house in the hopes of avoiding rent and possibly realizing capital gains when we move out. In the case of solar panels, the expected future returns are lower electricity bills. Calculating those returns requires forecasting what you would have paid for electricity had you not installed solar panels.

Electricity bills reflect the price we are charged for power multiplied by the amount of power we consume. In California, and many other states, the price we are charged varies as a function of how much power we consume. For instance, my family pays PG&E 13 cents per kilowatt-hour (kWh) for about the first third of our power, 15 cents for the next third and, in most months, 30 cents for the last couple kWh of electricity. People who consume more than us in Berkeley can pay as much as 34 cents per kWh. (The kWh thresholds, where the rates change, vary as a function of climate zones – they’re higher inland. They also differ between summer and winter.)

PG&E is using what are called “increasing block rates”: the price per kWh is increasing in the number of kWh we buy – the opposite of a volume discount. Here’s the thing: California regulators are currently considering flattening the increasing block rate structure. This could have a large impact on the savings from solar panels.

Keep in mind that the solar panels proposed for our family would not offset all of our power consumption. We’d still be buying about a third of our electricity from PG&E.  It would offset the most expensive 30 cent power, and leave us paying 13 cents for most of the remainder. But, if regulators flatten the rate structure, the savings from offsetting the high cost power will be lower, and our remaining charges will be higher.

One suggestion on my last post was to be more concrete: how much lower would the savings be if we discounted them, for instance? To get some sense for specifics and to devise some rough estimates of the impact of bill restructuring, I have devised a very crude spreadsheet.

To calculate discounted savings, I have to take a stand on the appropriate discount rate. One way to think about this is to compare the returns my family would earn if instead of buying the solar panels we made another investment, such as in the stock market. Historical stock returns, say over the past twenty-five years, have been around 10 percent, and given that we are making an estimate over the next 25 years, that’s probably a reasonable prediction. But, to allow for the fact that solar panels are probably less risky than an investment in the stock market, and returns from solar are most likely uncorrelated with the stock market (low beta), I used a 5 percent discount rate. If your alternative investment is something like a Treasury Bill, you might want to use a lower rate. At 5 percent, discounted cumulative savings, net of the panel costs, are negative through the first 12 years and only $13,500 cumulatively, compared to the $39,500 we were quoted.

Rate restructuring could have a big impact as well. I am not aware of specific proposals, so I considered a couple different options. If instead of 13 cents, 15 cents, 30 cents, the rates were changed to 15 cents, 16 cents and 24 cents, our discounted cumulative savings would be over 20 percent lower:  $10,500 instead of $13,500. To me, this seems like a big impact from a relatively small adjustment to rates.

If the restructuring is more dramatic, say a flat rate at 16 cents, the savings are reduced by more than half: less than $5,200 instead of $13,500. Note that I am assuming the rate restructuring is effective the first year we own the panels and then kept at the same relative levels into the future, but still escalating at over 5 percent a year. If these new rates only go up at 2.5 percent a year, our solar panels would never pay off.

It’s important to note that I am making pure guesses about rate restructuring. Regulators will have to consider many factors, such as whether the new rates provide PG&E the correct revenue. For most utilities, but not PG&E, households pay a fixed charge no matter how much power they consume. If this is on the table for PG&E in the future, the savings would be lower still.

A team of researchers at Lawrence Berkeley National Labs have put together a comprehensive analysis of the impact of different rate restructuring scenarios on bill savings for solar customers. They conclude that future regulations place substantial uncertainty on future bills, so that, “simple assumptions that project a flat or increasing value of bill savings over time (in real terms) may not be accurate.”

My own hope is that regulators will address this issue and, for instance, devise a more sophisticated version of my spreadsheet, both for potential consumers to use and to constrain how solar marketers display information.

One of my colleagues took pity on the solicitor noting, “Wow, did that company ever knock on the wrong door!” It could be, but everyone will eventually benefit if consumers are making well-informed choices.

Can you guess which room this is? It is the space my family calls the “home office.”

Misery loves company and, it turns out, I am in good company. According to a 2009 Energy Information Administration survey, 30% of the energy an average U.S. home consumes goes to powering electronic gadgets, small appliances, and lighting.  That figure is up nearly 10 percentage points from 1993, when it was roughly 20%. As the Wall Street Journal recently reported, much of this trend is attributable to the increase in energy-consuming gadgets in the home.

In our home office, I knew something was powering the blue, green, and red glowing lights when the house is dark, but I was once again shocked to discover that a large chunk of the KWH these electronic gadgets use are consumed when we’re not there.

When I shared my misery with friends and colleagues, several gloated that their entire home consumed just slightly more KWH a day than my home office. I was shocked again!

How do they do it? In addition to replacing dated refrigerators with brand-new Energy Star refrigerators and making capital investments in whole house weatherization strategies like window replacement, insulation, and caulking, their advice echoed the advice of other experts: unplug electronic gadgets such as televisions, cable boxes, computer monitors, printers, and chargers when not in use.

Crawling behind sofas and under tables to plug and unplug the television and various other gadgets reeks of serious inconvenience to me, but attaching gadgets to an easy-to-reach power strip with an on-off switch serves the same purpose with much less hassle (though still not hassle-free).

A colleague of mine, David Levine, recently wrote in an op-ed in the Los Angeles Times about phantom power, the power that appliances continue to draw even when they are not in use. In his op-ed, he proposes manufacturers be required to list how much phantom power a device consumes in order to provide consumers more information about energy use. He also points out that European regulations require new appliances to draw no more than 1 watt of power in standby mode.

Despite decades of efforts and billions of dollars directed at energy efficiency, we know (shockingly) little about which investments and/or behavioral nudges will give us the biggest bang for the energy efficiency buck. We also know (shockingly) little about how well current energy efficiency regulations and programs work.

To answer those questions, The Alfred P. Sloan Foundation recently funded The E2e Project, which I and my colleagues at the University of California at Berkeley – Catherine Wolfram – and the Massachusetts Institute of Technology – Michael Greenstone and Chris Knittel – founded, to bring rigorous, state-of-the-art evaluation techniques to energy efficiency programs.

The mission of E2e is to unite top researchers in order to create a cheaper and greener future.

And at the same time, the mission is a personal one as I continue to learn how to get the biggest bang for my energy efficient buck at home.

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