Recognizing the potential of energy efficiency to reduce CO2 emissions, the U.S. Environmental Protection Agency launched ENERGY STAR for Industry to educate manufacturers on steps to improve their energy efficiency. Energy management strategy is a key component of the ENERGY STAR approach. This paper focuses primarily on development of an updated ENERGY STAR industrial Energy Performance Indicator (EPI) for the Cement industry and the change in the energy performance of the industry observed when the benchmarking system was updated from the original benchmark year of 1997 to the new benchmark of 2008.
It is well documented that different manufacturing sectors require different amounts of energy. Primary materials conversion, e.g., iron ore and scrap into steel, limestone and sand into cement and glass, or wood and other fibers into paper, tend to be the most energy-intensive in the production process, while final consumer products like electronics and clothing require the least energy. This leads to something like the 80-20 rule, where a large portion of energy use is in a small number of industries. For example, the 2006 Manufacturing Energy Consumption Survey (MECS) reported that 75 percent of fuel use arises from only five of the 21 three-digit industries, using the North American Industry Classification System (NAICS). These five sectors are a small share of the total U.S. economy. The energy intensity for different industrial sectors is easily measured using published government statistics, but the plants within these industries are not homogeneous entities. This report measures the differences in energy use and associated CO2 emissions as a first step to understanding the within-sector heterogeneity of energy use.
In this paper we merge a well-cited survey of firm management practices into confidential plant level U.S. Census manufacturing data to examine whether generic, i.e. non-energy specific, firm management practices, ”spillover” to enhance energy efficiency in the United States. For U.S. manufacturing plants we find this relationship to be more nuanced than prior research on UK plants. Most management techniques are shown to have beneficial spillovers to energy efficiency, but an emphasis on generic targets, conditional on other management practices, results in spillovers that increase energy intensity. Our specification controls for industry specific effects at a detailed 6-digit NAICS level and finds the relationship between management and energy use to be strongest for firms in energy intensive industries. We interpret the empirical result that generic management practices do not necessarily spillover to improved energy performance as evidence of an “energy management gap.”
Under a cap-and-trade climate policy, emissions allowances—tradable rights to emit a fixed amount of greenhouse gases—become scarce and valuable resources that change the economic incentives to implement more energy-efficient processes and energy management practices, and to select fuels with lower carbon content. A key question accompanying the design of any such policy is how to allocate these allowances. This paper examines how key design elements and industry characteristics affect the distribution of allowances to U.S. pulp and paper firms under three variations of a proposed output-based allocation program—the American Power Act’s emissions allowance rebate program