Federal, state, and local governments could save at least $139 million annually by reducing energy waste through the purchase and use of energy-efficient products. Reducing this waste would reduce annual greenhouse gas emissions by 4.1 million metric tons of carbon (MMTCs) by the year 2010; the equivalent of planting an area of trees the size of Yellowstone National Park. In addition, with $50-70 billion in purchasing power for energy-related products, specifying energy efficiency could significantly shift the market for these products.
The Federal government recently launched the ENERGY STAR® Purchasing Initiative to channel the purchasing power of state and local governments -and its environmental impact- in the direction of energy-efficient products to capture significant environmental benefits and increase the demand in the marketplace. Part of this effort studied why governments don’t currently procure the most efficient products, and attempted to identify the changes that would be necessary to allow many governments to do so. Some of the initial barriers to energy-efficient procurement that were found are:
• Lack of information about the availability of energy-efficient products;
• Split incentives, where the agency purchasing the products do not pay for the utility bills directly and, therefore, have little interest, or incentive, to save energy;
• Misinformation about the benefits of energy efficiency;
• Energy efficiency not seen as a value-added aspect of procurement;
• Budget constraints; and
• Lowest first-cost bias.
This paper will present the results of this study and describe the mechanisms that will be put into place to address each of these barriers.