Volume 23, Number 2 April 1994


The following paper was presented at our Forum's 18th Annual Forum Awards Presentation, on 14 April 1993, at the APS meeting in Washington, DC. This paper prefaced the presentation of the 1993 Leo Szilard Award to Ray Kidder and Roy Woodruff. Physics and Society was unable to obtain copies of the other three talks presented on the same program. These talks were:

--"The climate for science: current trends and future prospects," Harvey Brooks, Harvard University, 1993 Forum Award Lecture.

--"Experiences and observations of an independent advisor," Ray Kidder, Lawrence Livermore National Laboratory, 1993 Leo Szilard Lecture

--"How U.S. scientists advise the federal government," Roy Woodruff, Los Alamos National Laboratory, 1993 Leo Szilard Lecture

Leo Szilard, The Man Behind the Award

William Lanouette

Leo Szilard is not a name you hear around most households. It isn't even a name you hear much around most science labs or classrooms. But when a complete history of 20th Century science is finally written, I suspect that Szilard's name will drive the indexers crazy--because it will seem to pop up everywhere.

Throughout a busy life that began in Budapest, Hungary, in 1898 and ended in La Jolla, California, in 1964, Leo Szilard managed to think up a surprising number of today's familiar inventions and institutions.

Szilard applied the concept of entropy to information, stating the basis of modern information theory in 1922; he thought up, with physicist Dennis Gabor, the mechanism for an electron microscope in 1927; he filed seven joint patents with his mentor and friend, Albert Einstein, in the 1920s for the first electromagnetic pump; he thought up and patented a linear accelerator in 1928, about the time that Rolf Wideroe first envisioned his successful invention; he patented a cyclotron in 1929, a year before Ernest Lawrence built his first machine at Berkeley; and in 1934 he devised the Szilard-Chalmers Effect for isotope separation.

In the 1940s and 50s, Szilard thought up, named, and sketched out plans for the breeder nuclear reactor. He invented the Chemostat for maintaining bacteria in a steady state; he pioneered biological studies for birth control; and he urged on the French biologists Monod and Jacob the idea of anti-repression in human immune systems, an explanation they first resisted but later tested--and for their breakthrough won a Nobel Prize. In 1960, Szilard devised radiation therapy that would cure him of bladder cancer, but he also invented a painless suicide machine--just in case.

In politics, Szilard was a founding participant of the Pugwash Conferences of Science and Word Affairs, which since 1957 have brought together the experts directly involved in the nuclear arms race and its control. At a private meeting in 1960, Szilard gained Soviet Premier Khrushchev's personal assent to the Moscow-Washington hotline. In 1962, here in Washington, Szilard founded the first political-action committee for arms control, the Council for a Livable World--an institution still thriving today.

Szilard loved to think up inventions, but then dropped them as his insatiable curiosity led to other topics. As a result, Szilard is best remembered today for three things: a patent, a letter, and a political satire.

His 1934 patent for the nuclear chain reaction led him to co-design, with Enrico Fermi, the world's first nuclear reactor. The reactor went critical at the University of Chicago in 1942, but when the US patent for it was issued publicly in 1955 it was to "E. Fermi, et al." The "et al" was Szilard.

The letter, written in 1939 to President Franklin Roosevelt, warned about German A-bomb research and urged a similar American effort. This letter led to the Manhattan Project, but is best know because it was signed by Albert Einstein. Later, Einstein said he "really only acted as a mail box" for Szilard. Indeed, Einstein signed two more of Szilard's letters to Roosevelt before World War II ended: one in 1940 to urge more research, and one in 1945 to introduce Szilard's ideas about post-war control of the A-bomb.

The 1940 letter dislodged some federal money for Fermi and Szilard to build exponential piles at Columbia University. The 1945 letter failed to reach FDR before his death, but Szilard was undeterred, went to the White House, and was sent by President Truman to meet his new Secretary of State. When nothing came of that, Szilard drafted the international-control sections of the Franck Report on future uses of the A-bomb, and he circulated a scientists' petition to Truman arguing for a demonstration of the A-bomb and against its use on Japanese cities.

After the war, Szilard led his scientific colleagues in their successful lobbying for civilian control of atomic energy, and he spent the rest of his life working on molecular biology and arms control. He died in 1964 at the Salk Institute for Biological Studies in California, a research center of his design that was to combine science and social issues.

Szilard's most memorable piece of political satire was "The Voice of the Dolphins," a "history" he wrote in 1960 to describe how, by the late 1980s, the US and USSR would finally reverse the nuclear arms race.

It was fitting that the APS should name its award for combining science and society after Leo Szilard. When Soviet physicist Andrei Sakharov received the award in 1983, he said that Szilard's devotion to public service "sprang from his innate, acute feeling of personal responsibility for the fate of mankind on our planet, and for the possible consequences of science's great victories." American physicist John Gibbons, former director of the Office of Technology Assessment and now President Clinton's science advisor, said when he received the award last year that "Szilard should be the Patron Saint of OTA" because of his many efforts to "clarify what the real issues were."

As you see, Szilard is most remembered for inventions that are not just scientific, but which apply science to social and political ends. As with Szilard, Kidder and Woodruff are not names you hear around most households. But around the labs where they have worked --and in the halls of government where their voices have been heard, and heeded--they are living legends.

The following article is based on one of the four talks given at our Forum's invited symposium "After the cold war: What now for science? A discussion of economic conversion," held at the March 1993 APS meeting in Seattle, Washington. Physics and Society was unable to obtain copies of the other three talks, which we list here:

--"The politics and economics of conversion," Seymour Melman, Columbia University

--"Attempts at conversion--successes and failures," Frank Emspak, University of Wisconsin-Extension, Madison

--"Government funding for basic research in physics," Melvin Lax, City College of the City University of New York

An Insider's Perspective: Grappling with Change at TRW

Jeff Newman

When the Cold War came to a close, I was an electronics engineer for a Los Angeles defense firm. For many of us in the defense industry this was a time of mixed emotions. On one hand, we felt had successfully thwarted the Soviet threat, making the world a safer place. However, with this victory came an uncertainty about the future of our jobs. Contrary to what those on the outside might think, the post-Cold-War era was received with fear and avoidance by most of my fellow workers. During my seven years working in the defense sector of TRW (an aerospace and automotive conglomerate) I became aware of the challenges that would face the defense industry in times of peace. Realizing that there were few mechanisms for our company to address the necessary changes, I began to explore the potential for conversion. I played a role in TRW's attempt to identify products and services for new lines of business, especially in the area of environmental monitoring technologies. To help steer TRW towards conversion, I initiated an ad hoc group called The Renaissance Committee to identify conversion problems and to establish a support network for changes within the firm. Our aim was to prepare for the rebirth of TRW as it shifted from a technology-driven monopsony to a demand-driven business. I later presented the group's ideas to a variety of people in upper management, but unfortunately I was laid off in Spring of 1992 before most of our ideas were adequately pursued.

Internal impediments

One fundamental problem at TRW was that the perceived value of a technology was not based on market-driven criteria. The management as a whole did not examine the demand-side opportunities for our technologies, and the company lacked a detailed strategic plan for adapting to the changing external and internal environment. At TRW, the ability to license or market cutting edge technology into the commercial arena was never a priority because it had not been a concern of the military "customer." In some cases, allocating time toward assessing commercial applications was viewed as a distraction from the purpose of the organization and a drain on the limited time of the technologists. Unless a technology was relevant to a particular contract, its business value was not pursued. This was true even in microelectronics, one of our strengths. In contrast, the Japanese have already targeted specific products for emerging technologies.

Another problem was the inconsistency between the stated objectives and the final decisions of management at the highest level. I witnessed one attempt at commercialization go awry, when a project based on a technology showing commercial promise was fully funded by upper management, only to be subsequently disabled by the highest echelon of management. The motivation for cancelling the project was to limit the visibility of potential failure, which is always a possibility when entering a new market.

The majority view from upper management at TRW was one of avoidance and denial. The radical changes we were experiencing were seen as just part of the normal business cycle. The view that the company could "ride out the storm" and consolidate its assets around its core competencies was shared by both upper management and my fellow line engineers. Many of my colleagues allowed themselves to get caught in the middle. They worked longer and harder, without extra pay, under the impression that they could save their jobs. Sadly, their real need was to begin a personal process of transition, since many of them were and are slated for lay off.

Exploring the potential for conversion

To allow for greater employee input in decision-making, TRW set up the NOVA Program--a panel of managers available to assist in the development of new lines of business. However, little came of this program because without a comprehensive plan, an employee could only push his or her ideas so far. So to encourage what I called "applied brainstorming," I started the Renaissance Committee. I recruited a team composed of a dozen people from management, marketing, engineering and strategic planning. We shared a common belief that improving the company was of greater importance than merely protecting our jobs, and that our potential could be brought out and our jobs enriched by meeting the challenges presented by conversion. We all understood that, since the committee was initiated with neither the sanction or recognition of management, we would have to carry out its work on our own time. We wanted to alter the internal environment and enable a change in the corporate culture.

One of our first tasks was to identify those in upper management who shared our assumption that the new business environment demanded radical, not just evolutionary, change. There was a distinct possibility that the "core" business might disappear and/or be replaced. We were also looking for the support of leaders who could influence those who clung to the values and perspectives of the status quo. Two Vice Presidents were supportive of our ideas, but we were unable to convince others in upper management to provide us with funding before I was let go due to lack of funding. When that occurred, the Renaissance Committee was abandoned.

An internal technology audit

Before being laid off, I made a presentation to a Vice President in the NOVA Program about the need for an internal technology audit to bring marketable products and services to the surface, and to identify the appropriate personnel to work on these ideas. My idea was met with enthusiasm and was made viable through the funding of three employees to help out part-time. I felt TRW needed a mechanism to disseminate and coordinate information about company personnel, ideas relevant to new products and services, and appropriate market segments. To this end I created an interactive database, called the Enterprise Exchange, which enabled personnel in diverse disciplines and geographical locations to discover each other and collaborate on the basis of common business interests. The database was completed at a pilot level, but was never fully implemented.

Restructuring the company bureaucracy

The lesson learned by me and my colleagues on the Renaissance Committee was that for large defense corporations to continue to exist in a changed world, it is necessary to examine the requisites for entering new markets as the old military market shrinks. To gain an understanding of its strengths, weaknesses and abilities to adapt, we educated ourselves about the history of the company. TRW's management and marketing structures had been set up to accommodate a single buyer (the U.S. government) and that buyer's peculiar purchasing requirements. Our corporate culture would have to evolve to meet the challenges of a changing business environment.

We realized there were several requisites to successful marketing of new products. Avenues for greater dialogue between management and informed employees must be a priority. The corporation must provide its technologists with data about appropriate markets, so they could plan accordingly. Through this increased participation in decision making, employees are better able to contribute information and ideas from their own perspective. This new viewpoint would help management understand the problems and potential already existing within the company. We saw the beginnings of this at TRW.

Further, the company itself must understand the match between the external market needs and the internal corporate resources and designs, as well as the undiscovered synergies between existing and planned technologies and services. To enable this, industry CEOs should tie a significant portion of incentive raises for the top echelon of management to creating at least one new product or service for the private or civilian government sector every two to three years.

Concluding thoughts

In my seven years at TRW, I witnessed the company succeed in doing what it was set up to do, but fail to develop a plan for adjusting to a changing world. There was neither the will nor the understanding among enough of the upper management to move safely into new markets. Unless the responsible parties in big defense companies and the federal administration initiate large-scale changes, there will be no potential for conversion. Instead, the corporations will have to consolidate, massive layoffs will continue, and we as a nation will lose an opportunity to reinvigorate our technological infrastructure. Although the defense industry has the talent and technology to greatly contribute to society, my experience shows that presently both top management and government pose major obstacles to positive and sustainable change.

The author is at 2000 Mathews Avenue #5, Redondo Beach, CA 90278. He published an article similar to this article in Positive Alternatives, Fall 1992, Center for Economic Conversion, Palo Alto, CA.

The following article is based on one of the five talks given at our Forum's invited symposium "Toward a genuine national energy strategy," held at the April 1993 APS meeting in Washington, DC. Although Physics and Society was unable to obtain copies of the other four talks, extensive abstracts of three of those talks are given below.

Promoting Energy Efficiency in the Utility Sector through Coordinated Regulations and Incentives

David Goldstein

Energy policy initiatives, primarily at the state level, have achieved significant successes over the past fifteen years. These successes lead us to a better knowledge of what the potential impact of new and existing technologies for energy efficiency and renewable energy can be, and how effective policies have been in securing energy goals.

I will begin by reviewing the potentials for energy efficiency in the utility sector, focusing on end-use efficiency measures. Then I will discuss how changes in the incentive structure faced by utilities and by their customers are already allowing great strides to be made towards achieving these efficiency potentials. Finally, I will discuss the implications of these policies and programs for research and new product development.

Potentials for end-use efficiency

Up until the mid-1970s, conventional wisdom held that energy demand must grow in proportion to economic production (gross domestic product or GDP). It also held that electricity demand grows faster than GDP, typically at 7% per year for the United States. Contemporaneous studies pointed out that such coupling was not necessary, that policies designed to increase efficiency, along with higher energy prices, would lead to a decoupling of energy (and electricity) with GDP.

This decoupling began to occur nationally for total energy after 1973. As shown in Figure I, energy per unit economic production declined about 25% over the following fifteen years. Even greater success was achieved in states that tried to develop affirmative energy policies. The figure also shows that in California, which adopted strong policies to reduce utility sector energy use, overall energy intensity went down faster than the rest of the United States, despite already starting at a lower level.

Figure II illustrates electricity intensity in California compared to the rest of the United States: through its energy policies, California was able to decouple electricity use from economic production as well.

Last year, several of the nation's leading environmental organizations completed a study of what could result from a comprehensive national energy policy based on lowest societal costs (1). The results are displayed in Figures III and IV. In the most aggressive "climate stabilization" scenario, electricity use declines by 14% in absolute terms while the economy grows by a factor of 2.4. Natural-gas consumption by end users (not including electric utilities) drops by 36%.

Politics to achieve energy efficiency

Over the past twenty years, energy efficiency standards for new buildings and products have accounted for the bulk of energy savings. For example, the California Energy Commission projected some 14,000 megawatts of peak power savings from building and appliance efficiency standards over a 20 year period (2), compared to a total state peak load of approximately 45,000 megawatts.

Utilities can promote energy efficiency by providing rebates or other financial or informational incentives to their customers to encourage the selection of more energy-efficient products and designs. These incentive programs work synergistically with standards.

Energy-efficiency standards assist utility incentive programs by providing a base beyond which utilities are justified in paying for savings. Standards also provide test procedures by which products or designs can be rated, so that savings from the utility program can be more easily quantified and qualifying products identified.

Utility programs complement standards by effectively testing the feasibility of higher standard levels. If a utility achieves high market penetration of a given level of efficiency across a broad range of product designs or manufacturers, this achievement provides evidence that a standard would be economically justified. Standards can then achieve the same effectiveness with higher market penetration and without the necessity of utility customers as a whole paying for the efficiency improvements.

Traditional regulatory practices fail to let utilities see the long-term costs of capital-intensive power supply projects when they are comparing the economics of efficiency versus new supply. Under these policies, kWh sales can be profitable to the utility even when they are not in society's long-run best interest.

The Energy Policy Act of 1992 encourages states to reform their regulation of utilities to correct misplaced incentives. This can be done by three simple mechanisms, all of which are used in some states: 1. Sales can be decoupled from profits. Under decoupling, a utility receives revenues based on projected sales, rather than actual sales. If it over-collects revenue due to higher sales than projected, this revenue, with interest, is returned to its customers in the form of lower rates the next year. The reverse situation applies for sales under the forecast. Revenues are thus constant. Since fuel costs are passed through directly to customers as an addition to ordinary revenue requirements, utility profits are also decoupled from sales. 2. Ability to pass through costs of energy efficiency programs. 3. Savings can be shared. Utilities in several states have been offered profit incentives in which some fraction of societal net benefit from energy efficiency programs--typically on the he order of 10%--is provided to shareholders. A utility makes money to the extent that it can install a larger number of more cost-effective energy efficiency measures.

When these three reforms are implemented, the results can be dramatic. Figure V shows the increase in energy savings from utility programs in California following a collaborative process in which these reforms were implemented. The growth of annual energy savings acquisitions is expected to continue, since many promising technologies and end-use areas have not yet been addressed by the utilities.

Transforming markets

Early utility energy efficiency programs took the viewpoint of an average consumer who would go into a store and choose among the products in stock. Utilities would survey what products were available in their areas through retailers or distributors and offer incentives for the better products. The result of this approach was small energy savings, because the range of available efficiencies typically is small, and because of a significant "free rider" problem: Many of the customers who accept utility incentives to buy the more efficient product might have bought it anyway.(3)

Later generation approaches to utility incentive programs recognize that the utility industry can be a large player in the consumer products market. They look upstream to the needs of the manufacturer and distributor, and at the availability of technologies that may or may not currently be in production. They feature bold efficiency targets, announced sufficiently in advance for manufacturers to respond.

This approach has had significant impacts in transforming the market. Its success is illustrated by residential refrigerators. After the efficiency improvements provoked by the 1987 California standards, the range of efficiencies offered on the market was low. 1988 data suggested that a program seeking 10% energy savings beyond the slightly more stringent 1990 federal standards would be difficult to implement, because (depending on size and features) only 10% of the models on the market met a 10% savings threshold. Only a handful of units--less than 1%--were 15% lower in energy use than the standards. While some utilities were deterred from running programs by these data, one utility did offer rebates, producing the results illustrated in Figure VI (4). For 1990, the California utilities, which represents over 10% of the national market for refrigerators, agreed to base their programs on uniform efficiency targets at 10% and 15% savings. The results were unexpectedly good: nearly half of the rebates were issued for the 15% models.

As a result of this success, the 1991 program added a 20% improvement category. As seen in Figure VI, this category was the most popular one for 1991, despite the fact that such products did not exist at all eighteen months earlier. The 1992 California program dropped incentives entirely for the 10 and 15% savings levels and added higher tiers at 25%, 30%, and for some utilities, 35% and 40%. Manufacturers responded to these higher levels by producing a large number of 30%-savings models, and a significant number of 35%-savings.

This new strategy is being pursued through a continent-wide collaboration of utilities, public interest organizations, and state and federal government called the Consortium for Energy Efficiency (CEE). CEE is designing model programs, analogous to the refrigerator program, that can be adopted voluntarily by utilities throughout North America. These programs will be based on levels of efficiency that could be manufactured and sold in a cost-effective manner if the market demand for new efficiency technologies is sufficiently high.

CEE will also explore additional methods of acquisition of efficiency measures not currently available on the market. An example of this approach is the "Gold Carrot"(TM) program for refrigerators, in which utilities offered a Request For Proposal for refrigerators with efficiencies far beyond anything available in the market. The contract will be awarded on the basis of maximizing the economic value of energy savings. By raising $30 million to purchase more than a quarter million refrigerators for their customers, participating utilities will be able to cause the creation and marketing of products that use some 50% less energy than the 1990 standards.

Currently, energy efficiency does not sell. Most consumers will not pay extra for a device that saves energy unless the additional costs pay back in two years or less, even if the device will use energy for 20 or 50 years. In many cases, customers won't even purchase devices with payback periods shorter than two years. Thus, a physicists or engineer who invents a new device or process that can save energy will not be funded by his or her company to undertake the research necessary for product development. The scientist's boss will conclude that even if the inventor is correct and meets costs and performance goals, the product will not sell.

With utility programs designed to transform markets, this will no longer be the case. Product designers will find that whenever a device makes sense economically for society as a whole, it will become marketable through utility programs. This change should have major implications for the directions of product development, providing new opportunities for physicists, chemists, and engineers to apply their creativity towards improving energy efficiency.

Such a dynamic will also increase the potential savings from energy efficiency measures. Studies such as "America's Energy Choices" are based on analysis of policies that will implement efficiency measures whose cost and performance can already be characterized and quantified. Additional improvements that would be cost-effective but are not accessible in the open literature can never be included in such studies. Thus, the true potential for energy savings may greatly exceed that of even the most optimistic rigorous study.


There is a vast potential for energy efficiency improvements in the utility sector. Realistic levels of implementation of known technologies can yield absolute reductions in utility energy use. Mechanisms to achieve this potential are evolving and working in a number of states and with a number of utilities. When these policy mechanisms become widely accepted, they will unleash substantial new work in research, development, and commercialization of new products and new design processes to meet societal needs for cost-effective energy savings.

1.	A. Meyer et al., America's Energy Choices, Union of Concerned 
	Scientists, Cambridge, MA, 1991.
2.	California Energy Commission, Energy Efficiency Report, 
	October 1990, P400-90-003.
3.	Under the existing utility regulatory schemes, such results, 
	featuring small energy savings but potentially moderately large 
	customer participation, could be more profitable to the utility 
	than the more effective energy efficiency programs described below.
4.	The results for 1989 are slightly less in energy savings than 
	illustrated on the graph, because the 10% and 15% categories for 
	that year referred tot he 1987 California standards rather than 
	the 1990 federal standards.  The difference between the standards 
	is roughly 2.5-5%.

The author is with the Natural Resources Defense Council, San Francisco

Abstract: Toward a Leaner and Greener Transportation System

Marc Ross, University of Michigan

Transportation is responsible for 25% of CO^2 emissions in the US, and is largely responsible for excessive ozone or carbon monoxide in several metropolitan areas. Emissions from new cars are much higher in use than laboratory tests and standards suggest. Transportation is also responsible for the lion's share of US petroleum consumption. Furthermore, although growth petroleum consumption has been constrained by fuel economy improvements, it is set to start again as the benefits of the CAFE standards are fully exploited and travel continues to increase. In the short term, more efficient petroleum-fueled vehicles, based for example on lean burn engines, sophisticated transmission management, idle off, efficient accessories, and more light materials, would help. In the medium term, natural gas vehicles might provide a lower-emissions alternative with good performance and costs and--if vehicle efficiency is high--good range.

In the long term, fuel cells appear attractive, and might profit from experience with a gaseous fuel. There are of course other interesting possibilities. R&D challenges will be discussed. One need is support for fundamental research at universities. Policies to encourage adoption of such technologies will also be addressed, including the issue of excessive reliance on regulations that are based on vehicle tests. To improve the environmental performance of such a pervasive activity as transportation, a multifaceted package of policies is needed, including correcting policies on the books that encourage automotive travel.

Abstract: The Outlook for Renewable Energy

Robert H. Williams, Princeton University

Despite the relative inattention in public policy over the last 12 years given to energy generally and to renewable energy in particular, major advances have been made on many fronts in the use of renewable energy sources for the production of fuels and electricity. These advances are likely to continue and may accelerate in the future, in response to growing concerns about the environment. If these emerging opportunities are seized it should be feasible to provide more than half of total world energy requirements with renewable energy sources by the middle of the next century at world energy prices that are not much higher than at present (1).

1.	T.B. Johansson, H. Kelly, A.K.N. Reddy, and R.H. Williams, in 
	T.B. Johansson, H. Kelly, A.K.N. Reddy, and R.H. Williams, editors, 
	Renewable Energy:  Sources for Fuels and Electricity, Island Press, 
	Washington DC, 1993, pages 1-71.

Abstract: Energy Efficiency, Newly Recognized Overseas, Can Replace Most Dangerous Nuclear Plants.

Arthur H. Rosenfeld, Lawrence Berkeley Laboratory

The cheapest way to achieve global energy/environmental goals is to encourage investment in efficiency overseas. Energy intensity is defined as E/GNP, where E = primary Energy, and GNP = Gross National Product. E/GNP is 2-3 times higher in the 2nd (formerly communist) and 3rd (developing) worlds than in the "1st" world. In the 1st world E/GNP is dropping 1-2%/year, but, except for China, it is still rising in worlds 2 and 3. For developing countries, E/GNP first rises with a need for heavy industry, then falls as efficiency improves and industry "lightens". In units of tonnes of oil equivalent ("toe"), the UK peaked at 1 "toe"/$1000 in 1880; with improved efficiency, France peaked at 0.5 in 1930, and Japan peaked at 0.4 in 1970.

But there are 7 serious barriers against efficient use of energy: (1) Price. Energy is invariably subsidized, keeping its price low. (2) Poor information, for instance no fuel economy labels on cars, equipment appliances. (3) Lack of choice. Little opportunity for comparison shopping. (4) Poor management. Industry still produces the wrong thing. Thus in Hungary 80% of the energy goes to heavy industry, which yields only 20% of the value added. (5) Ideological utility policy. Particularly in communist countries, energy and electrification were seen as manifest goods (the way we view wealth). There was no concept (as is now growing in the West) that a utility should provide efficient energy services instead of raw energy. So individual dwellings have no meters for heat or electricity, and one adjusts the temperature by opening the window. (6) Ideological western institutions, particularly the World Bank and the regional development banks, who typically devoted <1% of the energy sector loans to efficiency. (7) Large discount rates for future savings. Energy efficiency commonly has a higher first cost and a lower operating cost to the consumer. However, consumer behavior in the market reveals very large discount rates (perhaps 60% annually) for future savings--the poorer the consumer, the higher the discount rate. This skews the societal investments in favor of more energy supply.

Given the remarkable success of efficiency in the West, and the acceptance of "integrated utility planning" where utilities can diversify into more profitable investments on the customer side of the meter, all these barriers are crumbling rapidly. It should be easy to replace all the dangerous nuclear plants in the former Soviet Union with just more efficient lamps and motors.