The University of Arizona

Energy Efficiency

By Joe Abraham | The University of Arizona | June 17, 2009

Energy efficiency is probably the most cost-effective solution for reducing greenhouse gas emissions. In many cases, improving the efficiency of buildings, upgrading electrical appliances, and making other home and building modifications can save a significant amount of energy. Because the energy we use is primarily produced from fossil fuels, energy savings translate directly into reduced greenhouse gas emissions.

photo of a fluorescent light bulb and an incandescent light bulb

According to the U.S. EPA, a compact fluorescent bulb (left) uses 75 percent less energy than an incandescent bulb, lasts about 10 times longer, and saves about $30 in energy costs over its lifetime.
Credit: ©Souza Photography,

The climate action plans of states in the Southwest propose a range of voluntary and mandatory programs and policies. Their goals are to create incentives and remove barriers to accelerate greater adoption of energy efficiency through the following measures:

Discussion of these energy efficiency options below is based, in part, on a review and analysis of state plans created between 2005 and 2007 in Arizona, New Mexico, Colorado, and Utah to help achieve statewide greenhouse gas emission reductions. Gubernatorial executive orders instigated the planning processes in Arizona, New Mexico, and Utah, while a coalition of stakeholders including the state of Colorado led by a regional non-profit organization initiated the Colorado plan.

Changing utility regulation and energy efficiency programs

In the Southwest electricity and natural gas are provided by a variety of utilities:

  • Privately-owned
  • Publicly-owned (by cities, counties and tribes)
  • energy cooperatives, often in rural areas

Southwest states regulate the rates privately-owned utilities charge customers. The states also set rules and guidelines requiring utilities to operate energy efficiency programs that provide households and businesses with incentives to reduce and optimize energy consumption. It is through these programs that states see significant greenhouse gas emission reductions (Figure 1).

Graph of renewable energy recommendations

Figure 1. State climate action plan energy efficiency emission reduction recommendations.
| Enlarge This Figure |
Credit: Joe Abraham and Rebecca Macaulay, CLIMAS, The University of Arizona

Southwest state climate plans developed in 2006 and 2007 recommended expanding utility energy efficiency programs using the following policies:

  • Expanding utility energy efficiency education, outreach, and incentive programs that help customers identify and implement cost-effective efficiency solutions
  • Allowing utilities to charge customers a fee to fund the most cost-beneficial energy efficiency projects and strategies across a utility service area
  • Rewarding utilities that have developed effective and demonstrable energy efficiency programs
  • Separating utility revenue from sales of electricity, a policy referred to in the industry as “decoupling.” Utilities lose revenue when their customers use less energy, creating a disincentive for utilities to promote highly effective energy efficiency programs and technologies like “combined heat and power” systems. Allowing small automatic rate adjustments to help investor-owned utilities meet revenue goals may provide the incentives needed for utilities to support much greater expansion of energy efficiency programs. As of 2007, approximately 14 states including Arizona, Utah, and Colorado had approved or were studying this policy as a means to increase energy efficiency gains.1

Some of these policies have since been implemented or are being tested by states in the Southwest. Emission reduction estimates based on these policies (Figure 1) assume reductions in electricity and natural gas demand by approximately 1 percent per year from 2007 through 2020, with savings over the period ranging from $18 per ton of carbon dioxide (CO2) emissions reduced in New Mexico to more than $36 saved per ton in Arizona.

In addition to the policies above, state plans recommended three specific options that would require changing utility regulation:

  • Adjusting energy rates by time of day and season as a function of supply and demand, and establishing rates that increase in steps as customer energy use increases. The first strategy has been shown to help reduce peak energy demand, while the second provides incentives to reduce overall energy demand.
  • Requiring utilities to incorporate energy efficiency and renewable energy into longer-term energy planning, a process commonly referred to in the industry as “integrated resource planning” (IRP). Arizona’s estimated emission reductions of 28 million metric tons of CO2 (MMtCO2-e) from IRP, for example, is based on utilities factoring in a federal tax of $15 per metric ton of CO2 that creates an incentive to reduce emissions by increasing energy efficiency over the period of 2007 through 2020.
  • Requiring new energy to be produced below a CO2-per-unit-of-energy threshold. The “energy generation performance standard” would help states avoid meeting future energy demand with greenhouse gas-intensive sources like coal.
photo of NAU green building

Northern Arizona University's Applied Research and Development building is one of the greenest in the world.
Credit: Northern Arizona University

Making buildings more energy efficient

Approximately 43 percent of all CO2 emissions in the U.S. can be attributed to energy consumed by residential, commercial, and industrial buildings.2 Thus, improving the efficiency of buildings is a major emphasis of state and local efforts to reduce greenhouse gas emissions using policies and rules as well as voluntary programs.

State climate plans recommend that states and local municipalities adopt and regularly update modern energy efficiency building codes for all new residential and commercial buildings and major renovations of existing buildings. New Mexico’s plan also calls for requiring all new residential and commercial buildings to be wired and plumbed for solar panels and solar water heaters, making it more likely homeowners and building owners will install these cost- and energy-efficient technologies. Estimated emission reductions from building energy codes and efficiency improvements from 2007 through 2020 for Arizona, New Mexico, and Colorado combined amount to almost 100 MMtCO2-e (Figure 1).

Browse the American Council for an Energy-Efficient Economy’s user-friendly policy database to learn more about current state energy efficiency policies.

In addition to state and local energy efficiency codes, states can require new government buildings to comply with Leadership in Energy Efficient Design (LEED) building standards. The New Mexico and Colorado plans propose establishing low- and no-interest loans and revolving funds to improve the energy efficiency of existing state buildings, with repayment of loans based on energy cost savings realized by increased energy efficiency.

All three states identified “combined heat and power” (CHP) as a priority for improving the energy efficiency of buildings and reducing greenhouse gas emissions (Figure 1). CHP simultaneously provides electrical and heat needs from a single fuel source such as natural gas, biomass, waste heat, or oil. It is in use in a wide range of facilities, including industrial manufacturers, universities, wastewater treatment facilities, and multi-family housing. States propose a range of financial incentives to achieve greater use of CHP, as well as outreach and education aimed at building owners and managers.

Requiring more energy efficient electrical appliances

In addition to adopting federal energy efficiency programs like the U.S. Environmental Protection Agency EnergyStar and U.S. Department of Energy EnergySavers programs, states and local governments can adopt standards and incentives that set a baseline for the efficiency of various electrical appliances sold and used. Arizona appliance standards took effect in 2008. New Mexico recommended adopting state standards, which would result in approximately 2.1 MMtCO2-e in emission reductions for 2007 through 2020, with more than $40 saved per metric ton of CO2 reduced over the period, according to the state climate plan.

photo of NAU green building

Recycling and reusing recycled materials helps make the products we consume less energy-intensive.
Credit: ©Stephanie DeLay,

Increasing recycling and using recycled materials

Recycling can make many of the products we buy more energy efficient. Items like clothes, office supplies, and beverages have built-in greenhouse gas emissions before we acquire them: the extraction of raw materials, their production, and transportation add to their carbon footprint. Recycling and increasing the amount of recycled materials in the products we buy reduces greenhouse gas emissions by at least offsetting the energy used to extract new raw materials.

If we consider a product’s full life cycle, including how it is disposed of, recycling also helps reduce emissions by keeping recyclable materials out of landfills. Underground, landfill waste decomposes in the absence of oxygen, producing methane, a potent greenhouse gas that eventually seeps out of the landfill and into the atmosphere. Composting of organic materials is another way to reduce the production of methane at landfills. According to the EPA, landfills accounted for approximately 23 percent of total U.S. human-caused emissions in 2007 and were by far the largest source of human-caused methane emissions.3

Recycling programs are typically administered by local governments, but there are several things states can do to increase recycling and reduce waste:

  • Ensure state laws allow local governments to transition from completely voluntary to increasingly mandatory recycling programs. Both the Arizona and New Mexico state greenhouse gas plans recognize the need to move beyond voluntary programs to increase recycling rates
  • Expand grant programs that help overcome costs of setting up or expanding recycling programs
  • Implement and expand recycling and waste reduction outreach campaigns
  • Develop requirements for state government to purchase more recycled products and products with greater recycled content
  • Advocate for “pay-as-you-throw” rates that reward households and businesses that reducing their waste
  • Create and expand public-private partnerships that expand capacity to process recycled materials for reuse
  • Create and enhance incentives that increase demand for recycled materials

Related Links

Southwest Energy Efficiency Project
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Colorado Governor’s Energy Office
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2008 New Mexico Energy Efficiency Strategy
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2007 Utah Energy Efficiency Strategy
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U.S. Department of Energy Office of Energy Efficiency and Renewable Energy
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Arizona Department of Commerce Energy Efficiency Outreach
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U.S. Green Building Council’s Leadership in Energy and Efficient Design certification system
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U.S. EPA report on solid waste management and greenhouse gases
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  1. National Association of Regulatory Utility Commissioners. 2007. Decoupling for electricity & gas utilities: frequently asked questions, Grants and Research Department, September.
  2. Brown, M., F. Southworth, and T. Stovall. 2005. Towards a climate-friendly built environment. Pew Center on Global Climate Change Report.
  3. U.S. Environmental Protection Agency. 2009. Inventory of U.S. greenhouse gas emissions and sinks: 1990-2007. Report #EPA 430-R-09-004, Washington D.C..