In light of the immense strain that higher energy costs are imposing on the American people and threats to America posed by its dependence on foreign oil, there is no better time than now for President Bush to rally the nation into taking actions that result in an immediate and substantive impact on energy demand and hence energy prices.
If President Bush decides against the idea, I plea to the two presidential candidates to take the baton. I made this plea, described below, during and in the aftermath of a visit I made to the White House in December 2003 at a roundtable discussion in the Roosevelt Room. Since then I have watched with both alarm and a deep sense of loss, America's standard of living erode from the persistent increases in energy costs.
We Americans know of our storied history of banding together when called to for our collective good and would thus be acting in contempt of our brethren if we failed to unite for this common cause, which requires none of the bravery that was required by Americans during other challenges.
Government officials and the president of the United States in particular, must raise the public's consciousness about American's energy problem even beyond its current level and describe specific ways that Americans can pitch in and hence, help themselves. The government can do this in many ways, particularly through a very public effort that motivates people into taking a few simple steps regarding their consumption habits, as is explained below. This idea would have worked even before the recent run-up in energy costs, but the chances of success now are boosted by the extreme sense of anger and the personal financial pain that households are currently feeling as a result of high energy costs.
The enormous burden that higher energy costs place on the American people is accompanied by an extreme sense of helplessness about what they we do about it. The fact is, however, that we can do something about it. Americans can take actions that substantially lower energy costs both in the short- and long-run. All that is needed is for the President to tap into the indomitable American spirit, the spirit that has helped Americans to rise to the occasion whenever they have been called upon. Americans need simply be called to action. We need leadership.
What follows is a realistic proposal, one that is actionable and not meant for a mere intellectual discussion. It is an approach that has been given almost no attention despite its simplicity and its enormous potential for success. For the White House, which is being looked to for leadership on the energy front, it must now ask: Now that America is listening, what do we have to say?
As I mentioned, I have sent this proposal to the White House and I call upon others with influence to follow suit and contribute with their own ideas along these lines.
Recommendation to the President
I recommend that the President deliver a bold address outlining a series of largely voluntary measures that Americans would take to reduce their energy consumption. The President would plea to America, aiming to convince its citizens that a collective effort would have a substantial and immediate effect on energy prices and thus give Americans at least a modicum of control over energy prices, freeing them from the grips of the upward price spiral. Any such plea would almost immediately translate into lower energy prices owing to a significant "announcement effect" in the financial markets. Lower energy prices, in turn, would help boost the U.S. economy, which has been growing strongly but which could be growing even faster if not for the rise in energy prices.
As evidence of the potential for success of any conservation effort, the President could cite the success of a similar effort in California, which followed the energy crisis experienced there in 2000 and 2001. The crisis compelled the state to make a very public plea to its residents to cut back on energy usage and avoid a continuation of the rolling blackouts that were being experienced there. The experience proved that the public will act when called upon, especially when it serves its interests.
If such an effort were made on a national scale and expanded to include transportation, the results of such an effort would be massive. In California, for example, estimates are that that the state's conservation efforts reduced consumption by an amount equal to the output of many large power plants. In fact, it is estimated that California's efforts saved 5,570 megawatts of electricity during the summer of 2001-enough to power 5 million homes!
Small Changes in Supply and Demand Make a Difference
Even if the consumption savings of any conservation effort were to be small, the results would still be significant because small changes in supply and demand can make a huge difference in the price of oil, gasoline, natural gas, and commodities in general. Evidence of this is can be found in past responses to news disruptions to the supply of crude oil, where small disruptions of small duration had a large bearing on prices. It's the little things that matter.
The potential for success in a nationwide conservation effort is strongly supported by not only California's success but by the 25 years of success that the U.S. has had in reducing its energy costs as a percentage of the gross domestic product. Indeed, this gauge has been cut in half during the past quarter-century, helping the U.S. to improve, although not erase, its ability to withstand oil price shocks. The improvement is rooted largely in the oil shocks of the late 1970s and the early 1980s, which forced changes in consumption behavior that have carried through to the present. Examples include: improved fuel economies for automobiles; changed commercial lighting standards; new technological advances; and increased education about energy usage.
Announcement Effect Would Be Substantial
Any effort by the President to rally Americans to reduce energy consumption would have a large announcement effect, spurring an immediate decline in energy costs at virtually no cost to the government. The price decline would likely be long lasting as it would help to restore balance between supply and demand in the global energy market. Accolades would go to the President, buoying his legislative capacity, and the markets would cheer both the short- and long-term befits that the energy price decline would be expected to have on the economy.
Specific recommendations to the public, which the President would deliver in largely broad strokes at first, should be placed on a special website to more widely disseminate the action plan to the American people. The website should be augmented with a limited but focused advertising effort aimed at increasing public awareness of the plan. Widespread media coverage of these efforts would undoubtedly provide a substantial boost.
Select Actionable Recommendations
Below are a few simple but nonetheless compelling and impacting ideas. Several of the ideas lean toward improved efficiency in electricity consumption. This is because studies show that more energy savings can be squeezed from this area than any other:
The U.S. should provide information about and incentives for the increased use of compact fluorescent light bulbs (CFLs), which use substantially less energy than ordinary bulbs. For example, a 15-watt CFL has the same lighting equivalent of an ordinary 60-watt bulb. Legislation should also be considered to require light bulb manufacturers to produce a minimum percentage of CFLs as a percentage of all of the bulbs that they produce by a date much earlier than is currently legislated. While it is true that CFLs cost much more than ordinary bulbs, the cost savings of CFLs significantly exceed the added costs of buying the bulbs. I have more than 50 CFLs in my house.
Simple ideas that could help both educate and instill a new culture with respect to how Americans use energy should be implemented. Lessons learned following past energy shocks have transformed the way Americans consumed energy since then, and it is time for a new effort that further transforms and weaves itself into the cultural and economic fabric. I recall "Save-A-Watt" stickers put over light switches in my New York City school that distinctly changed the way that I consumed energy from then on. Ideas like this may seem silly and insignificant, but the impact could be substantial, especially when they become embedded into the culture of younger generations. A website for kids would make sense in this context.
State and local governments should update their commercial lighting standards, which is one of the best ways entities can reduce energy consumption in buildings. Secondary savings can come from reducing building cooling loads.
State and local governments should be pressured to add gas-electric hybrid buses to their fleets, especially in urban areas. They should also be pressured to follow New York City's lead by requiring taxi cabs to be all gas-electric hybrids within just a few years.
Larger incentives should be given to Americans to purchase gas-electric hybrid automobiles, and the U.S. government should coordinate with automobile manufacturers to increase the supply of these vehicles-perhaps via grants, which would be revenue neutral if energy costs were to fall.
I am hardly an expert on these matters but these are just a few ideas that seem to make sense. The key is to signal to the energy markets that the collective will of the people of the United States has been unified and will result in an immediate and substantial decline in demand for energy products.
The sharp increase in energy costs has wrought havoc on many of America's citizens. Many families are hurting right now and would almost certainly join any national effort that would help the country. America's ability to withstand crises is storied. It is time for the President to rally the nation to fight back and show the indomitable spirit it is famous for.
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