McKinsey: U.S. can meet entire 2020 emissions target while lowering the nation’s energy bill $700B

McKinsey must-read: U.S. can meet entire 2020 emissions target with efficiency and cogeneration while lowering the nation’s energy bill $700 billion!
July 29, 2009

More than perhaps any other company, McKinsey has documented how an aggressive energy efficiency strategy sharply lowers the cost of climate action (see “McKinsey 2008 Research in Review: Stabilizing at 450 ppm has a net cost near zero”).

Today they released their most comprehensive analysis to date of this country’s energy efficiency opportunity, “Unlocking energy efficiency in the U.S. economy.” Bottom line: If this country get serious about energy efficiency — for instance, by passing a climate and clean energy bill like Waxman-Markey — then we can sharply reduce existing emissions at a large net savings to the public and U.S. businesses. McKinsey has a new cost-curve just of efficiency measures (click to enlarge):


The width of each column on the chart represents the amount of efficiency potential (in trillion BTUs) found in that group of measures…. The height of each bar corresponds to the average annualized cost (in dollars per million BTU of potential).

For those expecting to seeing efficiency below the line (i.e. negative cost), McKinsey has added a dashed line that represents the average cost of a new power plant. McKinsey said at the press conference today that all the measures above have a positive net present value.

McKinsey explains that these measures, if fully enacted over the next decade, would save a remarkable 1.2 billion tons of CO2 equivalent, which is 17% of U.S. CO2e emissions in 2005. In other words, the entire 2020 target in the Waxman-Markey climate bill could be met with energy efficiency at a net savings to U.S. consumers and businesses of $700 billion.

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