ECONOMIC REPORT OF THE PRESIDENT

a projected range of $16 billion to $27 billion in 2025, and $25 billion to $45
billion in 2030 (EPA 2015c).17
Improving Energy Efficiency and Conservation
Improved energy efficiency reduces emissions and, by correcting
environmental externalities or information market failures, can also improve
economic efficiency. Administration initiatives have already succeeded
in improving energy efficiency in millions of homes around the country,
reducing energy costs, and cutting energy use by the Federal Government,
with greater improvements expected in future years. Technological shifts
have aided greatly in efficiency improvements. For example, LED lighting
has seen a nearly 90 percent decrease in cost per kilolumen since 2008. The
costs of lithium-ion battery packs for electric vehicles have fallen from above
$1,000/kWh in 2007 to under $410/kWh in 2014, with estimates for leading
manufacturers coming in as low as $300/kWh (Nykvist and Nilsoon 2015;
DOE 2015).
In the President’s first term, the departments of Energy and Housing
and Urban Development completed energy efficiency upgrades in over 1
million homes, saving families on average more than $400 each on their
heating and cooling bills in the first year alone (EOP 2016). The President
also launched the Better Buildings Challenge in 2011, a broad, multi-strategy
initiative to improve energy use in commercial, industrial, residential, and
public buildings by 20 percent by 2020 (DOE 2016b). More than 310 organizations
have committed to the Better Buildings Challenge, and the partners
have saved over 160 trillion Btus of energy from 2011 to 2015, leading to $1.3
billion in reduced energy costs (DOE 2016d).
Since 2009, the Department of Energy’s Building Technologies
Office has issued 42 new or updated energy efficiency standards for home
appliances, which are projected to save consumers more than $540 billion
on their utility bills through 2030, and to cut carbon dioxide emissions by
2.3 billion metric tons (DOE 2016a). The products covered by standards
represent about 90 percent of home energy use, 60 percent of commercial
17 The regulatory impact analysis for the CPP reports estimates in constant 2011 dollars. In
2015 dollars, the net benefits to the U.S. economy would be $1.1 to $7.1 billion in 2020, $17 to
$27 billion in 2025, and $26 to $47 billion in 2030. The CPP applies to existing power plants.
In October 2015, the EPA issued final carbon pollution standards for newly constructed,
modified, or reconstructed fossil-fuel-fired power plants. Due to projected market conditions
(particularly the expectation of continued low natural gas prices, which make it likely that any
new plants would comply with the rule’s requirements even if it were not in place), analyses
performed by the EPA and the U.S. Energy Information Administration (EIA) indicate that the
new source standards will have negligible impacts on emissions, as well as negligible economic
benefits and costs. Should gas prices rise significantly, the rule is projected to generate
significant net benefits (EPA 2015d).
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