Business Logic Says Energy Star Should Stay in the EPA
The US Administration is talking about turning the Environmental Protection Agency’s Energy Star program over to a non-profit organization. While everyone wants to see government waste reduced, Energy Star seems like the opposite of a wasteful program – it’s funded at roughly $50 million annually, and in 2015 generated $34 billion in savings for American consumers. That’s a return on investment that any business person would be proud of, even without considering the additional benefits of reduced energy consumption and emissions.
In part because of this level of consumer payback, and in part because it has built solid relations with manufacturers and industry groups, the Energy Star “brand” is widely known and trusted. And while we’re big believers that non-profit groups can successfully drive consumer-oriented conservation programs, they’re not always the optimal approach.
I got a lesson in this while computer shopping at Best Buy recently. I asked about products certified under the EPEAT green electronics program, an excellent effort that was kicked off by the EPA and is run by a non-profit, and the sales person had no idea what I was talking about. But he knew all about Energy Star computers and could rattle them off the top of his head. Yet EPEAT has been around a lot longer than Energy Star for electronics.
True, the Green Electronics Council budget is only 5 percent of the Energy Star budget, but they only cover electronics while Energy Star covers appliances, building products, lighting, commercial food service equipment, heating and cooling, and homes and buildings. And Energy Star does research which the Green Electronics Council can’t afford to do. The bottom line: Energy Star’s wide scope, broad acceptance, and tremendous effectiveness are big accomplishments, and evidence that the program deserves civic stewardship.
One risk of a spin-out is the business model. The Green Electronics Council collects money from companies wanting to certify their products, whereas Energy Star is able to certify products at no charge. This means we only see EPEAT-certified products from companies big enough to pay. While that’s probably not an issue for electronics manufacturers, in the broader markets covered by Energy Star it might keep smaller producers of things like lighting fixtures or building products out of the running—stymying rather than spurring innovation. And without government funds, non-profits are unlikely to grow enough to support scaled-up programs, and could even go under during lean times.
While I’m sure there are places to cut money from the US EPA budget, Energy Star is a rare program that pays back big and has won respect from both industry and consumers. I hope business logic prevails and this program is kept in the budget.
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