Audit finds Energy Star Program Flawed

Adverse Findings Call Into Question Half of EPA Global Warming Reductions – Similar Questions Raised About NJ’s Programs
In yet another illustration of failed voluntary market based environmental programs, the Office of Inspector General (IG) of the US Environmental Protection Agency (EPA) just released a critical audit of the “Energy Star” Program. See:
http://www.epa.gov/oig/reports/2009/20081217-09-P-0061.pdf
The Energy Star audit comes in the wake of a July 2008 IG Audit, that made similar negative findings regarding the performance of voluntary market based programs as alternatives to regulation. The July Audit was titled:
Voluntary Greenhouse Gas Reduction Programs Have Limited Potential:

The July IG audit concluded:
“The set of voluntary GHG programs we reviewed use outreach efforts to recruit program partners and reduce GHG emissions. .. We found that it is unlikely these voluntary programs can reduce more than 19 percent of the projected 2010 GHG emissions for their industry sectors. From this, we determined that if EPA wishes to reduce GHG emissions beyond this point, it needs to consider additional [regulatory] policy options.”
http://www.epa.gov/oig/reports/2008/20080723-08-P-0206.pdf
The more recent audit found: “ENERGY STAR is a voluntary program designed to help businesses and individuals protect the environment through superior energy efficiency. The ENERGY STAR program is one part of a larger U.S. government-wide agenda to address climate change.
EPA reports that approximately 1,700 manufacturers are using the ENERGY STAR label on over 40,000 product models across more than 50 product categories. Annually, consumers are reportedly purchasing approximately 300 million ENERGY STAR-qualified products and have invested in over 2 billion products since 1992.
ENERGY STAR is the most significant of the EPA’s greenhouse gas avoidance programs. In 2006, the program accounted for over 50 percent of EPA’s contribution. The success of ENERGY STAR is therefore central to whether the United States will meet the President Bush’s goal for reducing greenhouse gas intensity.
The EPA IG Audit concluded:
“We found the ENERGY STAR program’s reported savings claims were inaccurate and the reported annual savings unreliable. We identified several deficiencies with the shipment data and the process used in calculating benefits. Deficiencies included the lack of a quality review of the data collected; reliance on estimates, forecasting, and unverified third party reporting; and the potential inclusion of exported items.”
Few people realize that New Jersey shares many Bush EPA voluntary market based programs criticized by the IG. Due to the complex nature of the issues and pervasive PR, fewer still understand that – just like the Bush EPA – NJ does NOT regulate green house gas emissions.
NJ relies on the federal Energy Star program and other voluntary compliance policies in a wide array of DEP State programs. Therefore, the recent two EPA IG Audits call into question the integrity of DEP’s performance as well as NJ’s ability to meet the emission reduction requirements of the Global Warming Response Act.
For example, according to NJ DEP, the Energy Star Program is applicable to meeting NJ Green House gas reduction goals and targets. DEP endorses Energy Star and claims:
“The key benefits [of Energy Star] are:
* the products procured use 25 to 50% less energy
http://www.state.nj.us/dep/opsc/docs/Purchasing_Energy_Efficient_Products.pdf
* promotes Green Design and Sustainable Communities
http://www.state.nj.us/dep/opsc/docs/Green_Design.pdf
* helps meet Clean Air Act ozone, mercury, and fine particulate standards
http://www.state.nj.us/dep/baqp/rapt/tips.html
* Reduces air pollution
http://www.state.nj.us/dep/aqaweek/whatyoucando.htm
* promotes energy efficient building design
http://www.state.nj.us/dep/opsc/docs/energy_efficiency.pdf
The Wall Street meltdown epitomized the failure of market based policies that abandon traditional regulatory oversight.
Environmental policy – in Washington and NJ – has shared the same flawed anti-regulatory premises for almost 2 decades.
Let’s see if the Obama administration can deliver good old fashioned regulation, or pursue an environmental policy based on the economic development dominated triangulation of the Clinton years.