McKinsey Study Says the Market Alone Can’t Cut Carbon

Washington, DC (May 17, 2007)- McKinsey Global Institute released a study concluding that energy saving opportunities in American homes are immense with current technology, but new product standard mandates will be needed.


The report says that projected electricity consumption in residential buildings in the United States in 2020 could be reduced by more than a third if compact fluorescent light bulbs and an array of other high-efficiency options including water heaters, kitchen appliances, room-insulation materials and standby power were adopted across the nation. This would avoid the carbon emissions from over 100 new 600 MW coal-fired power plants.
Yet market forces alone will not be enough to cause wholesale adoption of the most energy-efficient technology, the report said. “The study makes a strong case for what economists tend to shy away from – market intervention,” said Diana Farrell, director of the institute. “But this would be market intervention to correct market distortions that exist.”
Related Resources:
International Herald Tribune
New York Times
McKinsey Global Institute