When it comes to the beneficiaries of President Biden’s infrastructure proposal, the Weatherization Assistance Program ranks among the big winners. The White House touted it as part of its $213 billion effort to build, preserve and retrofit homes, predicting it will “put union building trade workers to work upgrading homes and businesses to save families money.”
There’s just one problem: Independent analyses suggest that the program — which got its last big boost under the 2009 stimulus bill — isn’t a cost-efficient climate strategy. “As a pure carbon fighting policy, it looks expensive and low bang for the buck,” said University of Chicago professor Michael Greenstone, who studied efficiency efforts after leaving the Obama White House.
The weatherization plan is one of several embedded in Biden’s infrastructure proposal that reflect how political pragmatism has shaped the new administration’s governing style. Rather than seek the perfect policy answer — an approach touted by the Obama administration — they are focused on solutions that can muster a broad base of support. The plan also includes funding electric vehicles without setting a timeline for when the nation will stop selling gas-powered cars and trucks, and funding highly subsidized inland waterways without spelling out how much industry will pay for new locks and dams.
Greenstone, chief economist for the White House Council of Economic Advisers at the time, wondered whether the data justified the expense. So once he returned to academia, he ran two real-world experiments, including one of 30,000 Michigan households eligible for federal assistance and another in Wisconsin where 100,000 homes qualified for a utility efficiency program. Both found the efficiency investments were poor performers for households, because the realized savings were about half of what the engineering models had predicted.
The cost of cutting carbon through these programs translated to between $200 per ton and $300 per ton, much higher than any current market price for cutting greenhouse emissions. Greenstone said that although helping poorer Americans pay their energy bills is an important goal along with curbing emissions linked to climate change, “I would decouple them.”
“The climate crisis is so urgent that we all owe it to each other to be ruthlessly searching for the cheapest tons,” he said. “I would think in an unconstrained political world, there has to be a version of this policy that supports low-income families confronting higher energy policy prices and reduces carbon at a lower price per ton of CO2.”