By Steven Cohen, Ph.D., Director of the M.S. in Sustainability Management program, School of Professional Studies
Most organizations and most families understand that wasting resources wastes money and the efficient use of resources saves money that can then be put to better uses. The Trump Administration and some conservatives believe that energy efficiency policies and standards limit consumer choice and that people should be entitled to waste whatever they want to waste. I have sympathy for the view that consumers should not be compelled to be energy efficient, but none for the view that they should be ignorant of the costs of their choices. Moreover, I am very comfortable with the idea that government policy should promote (rather than require) energy efficiency. Energy efficiency makes our economy more productive and helps reduce the environmental impact of energy use. The Trump Administration has a different view and is doing everything it can to dismantle energy efficiency policy. As Brad Plumer reported in the New York Times this week:
“The Trump administration is dismantling a wide array of federal energy-efficiency programs at the same time that war in Iran is raising oil prices, climate change is fueling record heat that is driving up demand for air conditioning and new data centers are straining America’s electricity supply…Since the 1970s, administrations of both parties have issued regulations to reduce the amount of fuel used by cars, buildings and appliances to alleviate energy crunches…Mr. Trump has been a longtime critic of energy conservation rules, saying they limit consumer choice and ruin appliances. Over the past year, the administration has proposed rescinding requirements that manufacturers make washing machines and other appliances that use less electricity and water. The government has relaxed fuel-economy rules for new cars and trucks and criticized state building codes meant to curb energy use. Mr. Trump’s domestic policy bill last year phased out tax breaks for homeowners who upgraded insulation or bought more efficient water heaters. This month, the Energy Department took matters a step further and proposed a rule that could make it harder for future administrations to tighten appliance efficiency standards.”
The fundamental misunderstanding of the modern economy by this administration is quite amazing. Inconsistent, punitive, and rapidly modified tariffs weaken American businesses operating globally. The latest round of idiotic and hopefully illegal trade barriers began last week, and when coupled with the war-related rise in fossil fuel prices, threatens the American economy with inflation and disinvestment. Tariffs are a tax on American consumers. In essence, they are an implicit national sales tax. All advanced economies rely on global supply chains to enhance productivity and reduce prices. However, the economic destruction is broader than tariffs. Immigration restrictions impair our labor supply. Attacks on university-based science and international students have damaged our nation’s leadership in science and technology. And eliminating energy efficiency makes our economy less efficient and therefore less productive. Reduced energy cost per unit of economic output creates a competitive advantage for American businesses. It’s almost as if the nation’s enemies have designed the federal government’s policy environment for maximum negative economic damage.
There has been some successful pushback against misguided federal policy retreats. For example, last year, the Trump Administration tried to end the Energy Star program, which certifies products for energy efficiency and provides consumers with information on the annual costs of powering appliances. According to Jeff Brady of NPR this past February:
“The Trump administration tried to end the government's Energy Star program last year, but now Congress has passed — and President Trump has signed into law — bipartisan budget legislation that has the potential to strengthen the energy efficiency program by giving it dedicated funding. Such policy reversals have so far been rare for the Trump administration. But pushback against killing Energy Star came from a broad swath of stakeholders, including industries like real estate and construction, to which President Trump has longstanding ties. More than 1,000 manufacturers, home builders, advocacy groups and local governments signed a letter last April asking the administration to keep the program.”
Sadly, such commonsense policy reversals have been rare during Trump 2.0. Fortunately, the United States retains a federal governmental system with sovereign states and a still vibrant private sector. These other power centers have some tools to resist the destructive power of today’s federal government. States are using the courts to resist federal regulatory rollbacks, and these can delay and at times stop deregulation that contradicts the law. While appliance standards and motor vehicle standards are national, states and localities still control local building codes and, most crucially, electric, water, and gas utilities. Building codes are among the strongest state and local policy mechanisms because they can regulate building air leakage, windows, lighting, heating and cooling, and other elements of the efficiency of the built environment.
Utility regulation is another tool to promote energy efficiency. According to a January 2025 report by Jasmine Mah, Steven Nadel, and Sagarika Subramanian of the American Council for an Energy-Efficient Economy:
“Twenty-six states plus the District of Columbia presently have an energy efficiency resource standard (EERS), which requires utilities to achieve multiyear utility-sector energy savings. Most of these EERS policies contain ambitious features to accomplish goals beyond energy savings; these are known as next generation provisions. Of these states, 23 (including DC) have next generation features to use the EERS to help achieve additional goals. These include goals for decarbonization, electrification, and low-income spending or savings…Several states have greenhouse gas (GHG) reduction or fuel-neutral energy saving goals and/or electrification targets. Other states have authorized electrification programs in recent years without setting targets. States with EERS policies usually achieve much higher energy savings than states that operate energy efficiency programs without specific targets. In 2023, EERS states accounted for about 59% of the U.S. population but 82% of the savings across the United States from utility energy efficiency programs.”
In the private sector, we have seen the rise of Energy Service Companies, or ESCOs, that sell energy savings performance service contracts, where they combine energy audits, engineering, equipment installation, and finance to provide the technical expertise for organizations to utilize their energy more efficiently.
Energy Service Companies operate under a business model where they make money by sharing in the reduced energy expenses of organizations they have helped become more energy efficient. In the past, the federal Department of Energy encouraged these businesses and, as recently as September, 2025, even published a list of 91 qualified energy service firms. Full disclosure: Willdan Energy Solutions, one of those 91 qualified companies, is a division of the Willdan Group, where I sit on the Board of Directors. There is a private market for energy efficiency and for companies with the technical expertise to help other companies do a better job of managing their energy. This is to say that even apart from regulating the energy efficiency of appliances and equipment, there is a market for reducing energy use. Saving money seems to always stay in fashion.
The advantage of regulations and targets is that they stimulate technical innovation. A modern air conditioner uses about 40% of the energy that air conditioners used a generation ago and does a terrific job of cooling space. Heat pump and battery technologies are advancing rapidly as well. Some of this improvement would have happened anyway, but the pace of innovation was accelerated by the need to comply with regulations. Energy saving does not mean lower quality, but that is how anti-regulatory ideologues insist on seeing it. On the other side, the desire for command-and-control regulation to spur innovation can easily be misguided by being overly directive. When targets are set, they must be flexible enough to be delayed or modified if the technology they are hoping to force does not arrive or is too expensive to use.
The ideological divide in the United States is making matters worse. Corporations are neither inherently “good” nor “evil.” The market is a powerful motivator of behavior. So too is the rule of law, or we’d all live in some version of the Wild West. Most, but not all, of the organizational capacity that delivers goods and services in the United States comes from private, for-profit organizations. Their capacity to produce and innovate is staggering. But government and nonprofit organizations also have the capacity to produce for the public good and possess tools to influence the private sector to act in the public interest. But these means of regulating and incentivizing private actions must be used carefully and need to be in sync with the needs of consumers and producers. Energy efficiency is a sensible policy. It is the low-hanging fruit of policy to mitigate climate change. But its application requires care and precision. It calls for a scalpel, not a sledgehammer. Some climate activists are convinced that climate change is an existential crisis and that the ends justify the means. That is a misguided approach. The result has been the illogical pushback on energy efficiency policy of their ideological opponents, who now control the federal government. Nevertheless, it’s truly difficult to believe, but our federal government now promotes energy inefficiency. The economy’s resilience in the face of this idiocy is impressive and hopefully will manage to continue.
Views and opinions expressed here are those of the authors, and do not necessarily reflect the official position of Columbia School of Professional Studies or Columbia University.
About the Program
The Columbia University M.S. in Sustainability Management program offered by the School of Professional Studies in partnership with the Climate School provides students cutting-edge policy and management tools they can use to help public and private organizations and governments address environmental impacts and risks, pollution control, and remediation to achieve sustainability. The program is customized for working professionals and is offered as both a full- and part-time course of study.
