It astonishes me that the basics of human nature and the law of supply and demand seem to have escaped the ken of the West’s big thinkers—the politicians, think tanks, private do-good operators and media, but every now and then someone has to point these things out to them.
When it comes to energy conservation—the hat trick the left pulls to avoid facing the inability of renewable sources of energy to meet demonstrated and projected needs—every new brainstorm gets glowing endorsements in the press. When the stated objectives fail we rarely hear much of them. (It’s of a piece with the media magnifying the damage to the environment while ignoring for the most part the chopping of wild birds by windmills and the frying of them by solar fields, or the human and environmental tolls of lithium mining. )
I remember in 2006 arguing that a government plan to have utility companies retrofit for free homes in order to make them more energy efficient would not result in substantial reductions in electric demand or free up energy for other users. The point to me seemed obvious. When the cost of home heating is high, people would be more conscious of turning off lights and appliances when not in use. But if—as this plan provided in effect—homeowners would not after retrofitting pay more for increased energy use, they might prefer a cozier, warmer house or a brighter one or even add on a lovely heated porch.
Such views were of course cast aside by the big thinkers and here and abroad, and governments got involved in subsidizing retrofitting for conservation. President Obama launched home energy retrofit programs (the Home Energy score pilot program in 2010) to assess homes and offer cost-effective recommendations and low-cost loans up to $25,000 would be made available for “energy-saving improvements.”
In 2016 the domestic home energy conservation program became even more ambitious when the administration announced a Clean Energy Savings for All Americans program. The largest part of the program was the installation of solar and wind “to create a more inclusive workforce,” the latter, of course, padding the treasuries of non-government organizations, ostensibly to take people off the streets to train and employ them to install insulation, new windows, doors and solar equipment in existing homes (a project which to my mind seriously underestimates the skills in such construction work and overestimates the interest in such arduous work by the unemployed).
How this has fared I am unaware, but a similar program in Great Britain seems to have validated my earlier concerns about the efficacy of such projects. The far-left newspaper, The Guardian recently described a University of Cambridge report on the long-term effect of attic and wall insulation, and the report was what I had anticipated years ago. After retrofitting, there is a “rebound effect” which cancels out reductions in gas use. Put simply, with the cost of gas heating of their homes down, homeowners turned up the heat, opened windows to air out stuffy rooms and even built on extensions to their homes.
Once again, it’s the law of supply and demand which makes hash of so many bright ideas. Twenty-one years ago John LaPlante, predicted this. “Government-mandated conservation efforts never work to alleviate shortages. In fact, they do the opposite." With increased energy efficiency we are likely to consume more energy—and the result is either no net savings or even a loss of available energy. In the process, government-enforced measures like automobile fuel efficiency standards “impose unnecessary costs on people—even deadly costs” because smaller cars are less safe cars.
It may be unpleasant for the renewable energy crowd to concede this, but the reality is that “conservation doesn’t reduce overall energy consumption.” Increased energy efficiency may provide lower costs, making product prices more competitive and affordable for more people when driven by market forces, but government policy makers must face the fact that, as the Cambridge study found, government programs are not a means of reducing energy consumption. You really have to increase energy production.