Wednesday, December 15, 2010

Climate Change and You

Would you put a solar water heater in your home if you knew it would pay for itself in ten years? What about five years? Three? It is my guess that the tipping point for most is three years. More and more, I suspect that a key to quick progress in reducing greenhouse gas emissions is making it possible and desirable for masses of people to retrofit their lives. Products that curb carbon emissions are available for those that want them and can afford the up-front costs. The challenge to getting them into popular use is two-fold: creating the impetus, and making conversion pay. 

The brilliant idea of exploiting the three-year payback period came to me as I was driving the 63-mile route between Allentown and Princeton in my 2008 Honda Fit. I did some mental math. At 14,000 miles a year and 35 m.p.g., with gas costing $3 a gallon, I spend $100 a month, or $1200 a year (more or less) on gas. So a car that got about 100 m.p.g. would save me two-thirds of that, or $800. My three-year savings would be $2400. Add the trade-in value of my Fit, and I have about $17,000 to spend on a 100 m.p.g. car that would start saving me money after three years. 

One problem: there is no 100 m.p.g. car. A 50 m.p.g. Prius would bring my three-year savings down to about $1000 and my budget to about $15,600. Sadly, the cost of a 2008 Prius is $2000 more than my allowance. Not only does buying the Prius stretch the payback time to nine years, the small amount of pocket money after payback makes it not worth my trouble. For the calculation to work, the trade-in vehicle needs to guzzle more gas than my Fit, or someone needs to get to work mass-producing a 100 m.p.g. car. 

So how do we address the price gap between higher-cost low-emission and lower-cost high-emission products. One way is with the government’s oft-tried tax rebate, which only works with those who have the financial acuity to follow through, and the resources to wait six months or more for their reward. Another tactic is to simply raise the price of gas, oil, and electricity with taxation, making improved efficiency increasingly rewarding. A third possibility involves government subsidies that support technological innovation and production, which could bring the cost of clean-air vehicles down to within the three-year-savings magic number. None of these options is high on the government’s to-do list at the moment. 

This is where the fantasy non-profit, Three Year Solution, comes in. Funded by well-intentioned (and well-endowed) foundations, its mission is to close the gap on energy-efficient purchases by providing buyer subsidies. Let’s look at that solar water heater, which costs about $4000 more than an electric water heater to install, and saves about $275 a year. Until the electric/solar cost gap is reduced, solar water heaters will continue to be found only in the homes of the extremely far-sighted or the exceedingly ethical—or capable do-it-yourselfers. A subsidy of $3200 would make a solar water heater pay for itself in three years, and would encourage all those with a concern for the environment (or with a broken electric water heater) to at least look at the solar option. 

As with any brilliant idea, there are complications. Maintenance of newer technologies requires specialized technicians, which may raise the cost of keeping the new stuff up and running, stretching the three-year payback to a disappointing five or more. Getting rid of that serviceable but inefficient electric water heater will mean more waste. A glut of used products may make them very cheap to buy, increasing the price gap. The biggest dilemma of all, and the most difficult, is the problem that points directly to its need: People, even environmentally conscientious people, are suspicious of change. It makes us feel that we are losing control of our lives. This is precisely why we all need a push that will help us to be the change, and an incentive that will remove the barriers to change, both perceived and real. If people literally “buy in” to a climate change solution, it will be difficult for them to dismiss the problem … one would think. All I need to get up and running are:
·      A financial expert
·      A plan for getting subsidies to sellers, rather than buyers (so the sticker price reflects the three-year payback)
·      A list of energy-efficient products, along with a list of corresponding standard products, with prices and energy costs
·      A very smart publicity campaign
·      A few billion dollars

At the end of three years will ideas about personal responsibility for the carbon in the air have changed? Will electric water heaters and gas-guzzling automobiles be on their way to obsolescence? Will our political representatives have seen the light? Because this is a fantasy, I will tell you that all of this will have happened, and that the U.S., as a result, will have become a more hopeful place. 

But … back in the real world where Congress bickers about taxes while the world warms and the U.S. government shuffles a glut of subsidized corn to ethanol factories while doling out a pittance for soar and wind technologies, 191 governments met in Cancun and agreed that something should be done about global warming. Actual details about what and how are sketchy. There is an information gap and a perception gap between climate science and the way we live, along with the very real price gap that delays the retrofitting of our kitchens and commutes. Only in a fantasy world can we fix the problems caused by our emissions in three years, but those in charge need to know that we’re willing. “A word after a word after a word is power,” wrote Margaret Atwood. We must start letting policy-makers know by our words and actions that they should take off the blinders. We need to tell them that we are not as stupid or as shortsighted as they think we are. 

We just need a little help.


  1. Hi Pam,
    Interesting stuff. Fia Feller gave me your link. I work for the National Renewable Energy Lab, and am working on energy efficiency. Big issue, as you so rightly note, is financing and where that "sweet spot" is. I am not sure how far along you are with this non-profit, but I will be interested to hear of your progress.

  2. Peg, Maybe I should have titled the post "Steal this Idea," as I am in no position to actually create a non-profit. We can spread the empowering realization that individual change drives policy, rather then the other way around ... so especially true when policy changes will affect corporate interests. Here's to engaging the "sweet spot" in 2011, and nudging the policy makers and naysayers forward.