At a time when energy prices are at record levels, when scientists have concluded that global warming is a fact not a debate, it is surprising to find that a large number of retail stores and restaurants across the country leave their doors open in 90+ degree heat. My own unscientific survey shows that the incidence of this energy wasting behavior is, if anything, increasing. In asking employees why doors remain open, I have been met with shrugs, "management says it is policy," "it draws customers in" as explanations.
A deeper understanding of reasons of why businesses (and customers who seem to have no objections) engage in this practice would inform the types of policy prescriptions the new President should set forth: is it to make markets work better through different price signals, to set tighter rules, or to better educate consumers?
It would seem that there are at least six hypotheses (most faulty) that would explain this apparent disconnect between common sense and behavior. I have ignored overtly foolish ones, such as the idea that people think they will solve global warming by trying to air condition the outside or that consumers are too weak to open doors.
1. Producing electricity doesn't contribute to global warming. A faulty explanation. Most electricity in the US is produced from coal. Since most electricity is also produced far from most cities, we do not see it produced nor see smoke or waste heat produced from plants. While US coal fired plants are more efficient than many in China and India, most of the increase in greenhouse gases coming from those countries stems from coal-produced electricity.
2. Buildings don't contribute much to global warming. Another faulty explanation. We tend to think of SUVs as energy hogs -- and they are -- but buildings account for over 40% of energy use in the US, while car transportation is about 25%.
3. The solution is global warming is more about producing more clean energy than efficiency. Another faulty explanation. Given that most -- perhaps more than 90% -- of energy is lost in conversion, distribution, and before it is used to heat, cool, and light where people need it, improving building efficiency is the cheapest, easiest source of C02 reduction. Renewable energy in the US represents less than 3% of energy production; it will take a long time for massive amounts of clean electricity production to come on stream. The cleanest (and cheapest) new electricity plants are the ones that don't need to be built.
4. Air conditioning is not a major factor in global warming. Faulty. Global demand for air conditioning is increasing at 13% per year. On hot summer days in the US, air conditioning represents 50-70% of electricity consumption. Demand for peak electricity in the US is growing twice as fast as the demand for electricity as a whole. Much of this is driven by air conditioning demand. What has driven this increase in demand is the way buildings are built and demographic changes, not global warming. Imagine how much more air conditioning we will need.
5. Solving the energy problem is a burden of corporate sector or the government. Partially true, although all of us need to act. To put the air conditioning problem into context, air conditioning manufacturers have improved efficiencies by 30% over the last 15 years to meet rising government requirements. Keeping doors open in the summer can easily cancel out these efficiency gains with wasted energy.
6. Business owners are making rational economic decisions. Probably true. It may be that increased electricity costs are offset by more business. Electricity costs are reasonable in the US, with no "cost of carbon" in current electricity prices. There is an inadequate economic incentive to be more efficient. It may also be that there is a free rider problem going on. A particular business owner may not like the idea of contributing to global warming but is worried that if every other business has its doors open, he may have to keep his doors open, too, because he will be otherwise disadvantaged. It may also be that the scope of the problem seems so overwhelming that participants will keep "cheating" as long as they can.
Several Washington Senators and Members of Congress have called for another "Manhattan Project" to fund new renewable energy technologies. We don't need a technology breakthrough to have business owners shut their doors in the middle of the summer (some by the way do, the same in the winter, for apparently similar reasons). But perhaps we should spend some money to figure out why they don't.