An Energy Efficiency Trading System

Policy Paper
Feb. 1, 2007

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Reducing the economic and environmental risks of excessive energy use must become one of America's most important national goals. The most promising way forward is to reduce energy demand by spurring a revolution in energy efficiency. Indeed, efficiency is America's largest and most cost-effective potential energy resource.

Phasing in tough new energy standards for America's biggest energy users and making energy efficiency tradable -- much the way we now trade oil and natural gas -- would quickly reduce total energy consumption while limiting carbon emissions. A market for standardized efficiency credits (white tags) will give utilities, builders, and vehicle manufacturers flexibility in meeting strict efficiency goals while stimulating new technologies, creating jobs, and improving the nation's overall productivity and competitiveness.

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