WASHINGTON: The United States could save about $600 billion in energy costs by 2020 if it hiked annual efficiency spending about five-fold,business consultants McKinsey and Co said in a report on Wednesday.
Governments, businesses and the general public would have to boost annual spending on existing energy-saving measures, like insulating walls and more efficient appliances, from about $10 billion annually to $50 billion per year. The upfront costs would pay off by saving $1.2 trillion by 2020, according to the report called "Unlocking Energy Efficiency in the US Economy."
The report, which did not look at energy used in transportation, said the savings would cut energy used for heating and to generate power about 23 percent.
It would cut US greenhouse gas emissions by about 1.1 gigatons annually -- or the equivalent of taking the entire fleet of US vehicles off the road, the report said.
"The potential to reduce the energy we waste is compelling," said Kenneth Ostrowski, a senior partner at McKinsey. To reach the savings, the country needs coordinated national and regional strategies to overcome barriers and deploy more energy efficiency technologies, he said.
The climate bill passed by the House of Representatives includes measures for energy efficiency that would be included with renewable energy programs. The legislation faces an uncertain future in the Senate.
Some efficiency gains have been made through initiatives such as the Long Island Green Homes initiative, in which the town of Babylon helps finance energy retrofits for homeowners.
But such programs need to be speeded up, said McKinsey principal Jon Creyts, who added it would take 100 years for such programs to reach their full potential.
Lisa Jackson, administrator of the Environmental Protection Agency, said in a release about the report that, "The energy that most effectively cuts costs, protects us from climate change, and reduces our dependence of foreign oil is the energy that's never used in the first place."
Barbara Hingst, a marketing vice president at power utility Southern Co, said the report was an accurate portrayal of the potential to save energy, but "what can actually be saved will all depend on what policies and programs are going to be implemented to achieve it."
