On September 24, 2008, the New America Foundation’s Next Social Contract Initiative and Economic Growth Program hosted a panel discussion about the latest proposal in New America’s “Big Ideas” series: NAF Irvine Fellow Lisa Margonelli’s “Energy Security for American Families Initiative” (ESAF). New America’s Frank Micciche moderated the panel, which also included Dr. Mark Cooper, Research Director of the Consumer Federation of America; Therese Langer, Transportation Program Director at the American Council for an Energy-Efficient Economy; and David Manning, Executive VP for US External Affairs at National Grid.

Margonelli pointedly outlined the economic squeeze that moderate-income families face because of rising energy prices, and criticized conventional fixes such as a gas tax holiday or simple tax credits as distortionary and ineffective in stimulating the economy. ESAF would instead put in place policies that actively invest in energy efficiency: vouchers and low-interest loans to purchase energy-efficient vehicles; incentives to car dealerships that stock energy-efficient models; vouchers for home weatherization and Energy Star appliances; and tax incentives for carpooling and vanpooling. These measures, according to Margonelli, will save money, increase domestic investment, lower pollution and carbon emissions, and offer the public a politically-favorable response to high gas prices.

Dr. Cooper broadly agreed with the contours of Margonelli’s plan. Cooper emphasized that tackling household energy consumption is crucial to solving both the energy and housing crises. He stressed the importance of incentivizing individual consumers’ decision-making. Approaching the issues from the broader perspectives of land-use and development density, Dr. Langer also found much to recommend in the ESAF plan, and offered some additional policy recommendations: location-efficient mortgages, for example, and new transportation pricing measures such as “pay-as-you-drive” car insurance.

Finally, David Manning detailed the efforts that National Grid has taken to help consumers reduce their demand for energy. He noted that utilities currently have no profit incentive to promote conservation, as they earn revenue based on their customers’ level of consumption. Manning suggested a new utility pricing system that de-couples the “throughput” of energy from the volume utilized. Under such a system, utilities would receive a flat per-customer rate for providing service, with discounts for efficiency gains and decreases in energy usage. A free-wheeling question-and-answer session concluded the event.

-Daniel Mandel, Research Associate for the Next Social Contract Initiative