… Obama has already taken several whacks at waste in energy and health care. His stimulus had over $20 billion for energy-efficiency measures designed to slash electricity use in low-income homes, military bases and all kinds of government buildings, while his fuel-efficiency standards for vehicles are expected to save billions of gallons of gasoline; he’s also providing government financing for electric cars, and his cash-for-clunkers program is another assault on gas guzzlers.
…So don’t expect government intervention on the demand side — through education campaigns, tax incentives or targeted subsidies — to rein in our cravings. But in the energy arena, several states have already proven that rationalizing incentives on the supply side can transform the landscape. In most of the country, per capita electricity use has increased about 50% over the past three decades — despite conservation programs, efficiency incentives and the general rise of green. But in California and the Pacific Northwest, where state legislatures decoupled utility profits from sales volumes, electricity use has been flat. Instead of an incentive to sell more power and build more generating plants, the utilities had an incentive to help their customers save electricity and avoid the need for new generating plants. So that’s what they did. Energy providers were much better than the government at influencing the behaviors of energy consumers. “That’s what we need in health care,” says Dr. Elliott Fisher of the Dartmouth Institute. “When providers get rewarded for volume, they provide volume. That’s got to change.”
