Election Results Bring Both Uncertainty and Hope for Energy Efficiency

What do the 2016 election results mean for energy efficiency?

American Council for an Energy-Efficient Economy (ACEEE), November 10, 2016

Now that the hard-fought 2016 election is over, I think it is useful to consider its impact on energy efficiency policy. No doubt, a lot of uncertainty remains because of President-elect Donald Trump’s lack of specificity on many issues. Yet given the bi-partisan, good-for-business appeal of energy efficiency, I see potential paths forward and work to be done. Of course, we also need to be ready to defend against legislative or administrative attempts to roll back current energy efficiency policies, programs, and funding, which could wipe out the major energy bill savings, job growth, and health benefits that we have achieved.

President-elect Trump has said very little about energy efficiency, so what happens in a Trump administration is likely to depend on his senior appointments, such as the new secretary of energy and the new administrator of the Environmental Protection Agency. Trump has spoken a bit about climate change, which he called a “hoax” created by the Chinese to suppress the U.S. economy (although he’s tempered these comments more recently). He’s pledged to end the Clean Power Plan and to withdraw from the Paris climate change treaty. To change either of these could well require a multiyear process but he could also not do much to follow through on either of these and let them be essentially unimplemented. And years ago, he said green buildings have not been perfected yet and that it takes 40 years to get your money back (see here).

Potential Opportunities

Despite these comments, there may be opportunities for progress. In his victory speech, Trump pledged to increase infrastructure spending. Energy efficiency could be part of that. An infrastructure package could include investments in transportation, water systems, high-speed internet, and a smart grid, all of which can contribute to economic growth and efficiency. Another possible place for action is tax reform, a very high priority of House Speaker Paul Ryan. While tax reform will primarily focus on tax rates and tax simplification, some energy efficiency provisions might be included, such as overhauling commercial depreciation rules that discourage investments in commercial equipment and changing energy efficiency tax credits so they are performance-based and phase out when markets are transformed (ACEEE is working on both of these issues – see here). And if energy legislation does not pass this year (currently a House-Senate conference committee is working to resolve differences between House- and Senate-passed bills), energy legislation could return next year.

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