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Advocacy groups are pushing to include the State Energy Race to the Top Initiative Act of 2013 legislation as an amendment to the Shaheen–Portman efficiency bill. But the “race to the top” idea amounts to nothing more than a subsidy-filled race to the trough for companies that are hungry to gobble up taxpayer dollars.
Proposed by President Obama in his State of the Union speech and more recently in legislation introduced by Senators Mark Warner (D–VA) and Joe Manchin (D–WV), the race to the top is a $200 million grant program to promote energy efficiency that adds even more taxpayer money to existing federal and state efficiency subsidies and mandates. (The legislation has a spending offset, but only by replacing one unnecessary, taxpayer-funded energy efficiency program with another one.)
States and qualifying entities would submit proposals to the Department of Energy (DOE) for efficiency upgrades such as building retrofits for public and private commercial buildings, schools, hospitals, and residential buildings as well as industrial efficiency, demand-side management, and more. The DOE would provide a first phase of funding to no more than 25 states and a second round of much larger grants to no more than six states based on the project proposal, geography, and likelihood of success.
If spending on efficiency increases competitiveness or saves businesses and manufacturers money, they should make those investments on their own. In fact, companies invest in innovative technologies that conserve energy all the time, because such investments do save money and make their products more competitive. They do not need the federal government to prod them with taxpayer-funded subsidies.
Energy efficiency per dollar of gross domestic product has improved dramatically over the past 60 years. Some might wrongly suggest that this was the result of efficiency standards, but technological improvements and consumer preference are the cause, and energy intensity has been in decline long before a national energy efficiency policy.
The race to the top program duplicates the many existing state and federal efficiency programs that already exist. It would provide another incentive for companies to build business models around government programs to collect taxpayer cash rather than competing in the marketplace. Government mandates, rebate programs, or spending initiatives to make businesses and homeowners more energy efficient take choices away from families and businesses and skew the rules of free enterprise.
We do not need a race to the top energy initiative funded by the government. Good ideas, competitive technologies, and profitable ventures will rise to the top without the taxpayers’ help.