McKinsey calls for energy-efficiency standards

The McKinsey Global Institute, the research side of business-consulting giant McKinsey & Co., is calling for government-mandated efficiency standards for electrical devices, according to the New York Times. The argument for why the market can’t promote a lot of needed change is interesting:

For example, a person renting an apartment may be using appliances that consume a lot of electric power. The landlord has little incentive to buy new, more efficient appliances because the tenant pays the electricity bills. And the person renting the apartment, who may intend to stay for a year or two, has scant incentive to buy energy-efficient appliances. So a lot of electrical power is wasted.

“Everyone would be better off if the capital investments were made,” [institute director Diana] Farrell said. “But the individual parties do not have the incentives to make the needed investments.”

The report itself, which is a beast that I have not yet read but intend to, is here.

The Times quotes a Harvard economist who objects to energy-efficiency mandates on the grounds that they impose regressive costs on poor people, who can’t necessarily afford the up-front prices of more efficient devices. Then he proposes a $100-a-ton charge on carbon dioxide emissions for everyone, so it’s hard to see his point.


One response to “McKinsey calls for energy-efficiency standards

  1. Pingback: Gas-guzzlers slow to change their habits « The EcoLibertarian

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