The Bozeman Citizens Climate Protection Task Force was formed to help the city reduce greenhouse-gas emissions 15 percent below 2000 levels by 2020. It has proposed some dozen recommendations, ranging from adopting green building codes to buying energy from alternative sources. The task force believes many of their recommendations will be “cost neutral.” As a model they point to Seattle. Last year the Emerald City claimed to reduce its greenhouse-gas emissions 60 percent below 1990 levels.

Seattle’s success in reducing CO2 emissions comes largely from creative accounting. For example, Seattle canceled a contract to buy energy from a coal-fired plant in Centralia, WA, and while that CO2 still entered the atmosphere, Seattle counted it as a reduction. In this regard, Seattle’s success is similar to countries in the European Union, who realized large reductions in CO2 emissions after the collapse of Communism. The reason? Highly inefficient industrial equipment was either shuttered or replaced with more efficient western designs.

Further, 95 percent of Seattle’s energy comes from low carbon sources such as hydro and nuclear. The city also failed to account for the carbon inputs of all the steel and concrete used in construction within the city. Finally, prices, not government policies helped reduce Seattle’s CO2 emissions, as residents shifted from expensive heating oil to cheaper natural gas. (When burned, natural gas produces less CO2 than heating oil.)

Bozeman faces many demands and has limited resources. In this environment, successful city managers ignore energy cost savings at their peril. If it makes sense to implement energy saving programs (i.e., the benefits exceed the costs), they will be implemented. There is no need to enact a set of mandates.

Such intervention frequently benefits politically favored groups (think ethanol). And the unintended consequences can increase the cost of energy and delay the adoption of innovative technologies. For example, German subsidies for solar panels have raised the price of installation in more appropriate, i.e., sunny, locales.

Common sense tells us that increasing energy efficiency reduces energy use. This is not so. William Stanley Jevons first identified this paradox in his 1865 book, The Coal Question. Jevons observed that England’s consumption of coal soared after James Watt introduced his coal-fired steam engine, which represented a vast improvement on Thomas Newcomen’s inefficient design.

Jevons pointed out that efficiency gains reduce the cost of energy, allowing the steam engine to penetrate other industries, i.e., textiles. This lead to an increase in the total energy consumed. Jevons wrote: “It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth.”

The increase in the use of household appliances bears this out. As appliances become ever more energy efficient, we use more of them. Survey data for 1980 and 2001 shows increases in microwave ovens from 14 percent to 86 percent, dishwashers from 37 percent to 53 percent, and central air conditioning from 27 percent to 55 percent.

Even though energy efficiency has improved in almost every aspect of our society, overall energy consumption continues to grow. Improvements in energy efficiency are good for the economy and for people’s lives. But it doesn’t mean we’ll use less energy overall. We’ll use more, especially in the developing world. In their 2005 book, The Bottomless Well, Peter Huber and Mark Mills wrote, “Efficiency fails to curb demand because it lets more people do more, and do it faster—and more/more/faster invariably swamps all the efficiency gains.”

If the task force is serious, they will investigate policies that align incentives with environmental goals. One of the most promising is the possibility of real time pricing of electricity. Exposing energy users to the actual costs of the energy they consume will speed the transition to alternative sources and induce conservation.

In a competitive economy, and when people are held accountable for the consequences of their actions, pollution and waste indicate inefficiency. Without government protection, inefficient processes are filtered out. The market process, like evolution, is a constant search for fitness. In the long run, companies face persistent economic and social pressures to become green.