Podcast transcript: Environmental Impact of Consumer Electronics Products

October 16, 2006

ANDREW FANARA: Did you know the average home pollutes twice as much as the average car? With all the electronics products that end up in our homes today, we are using more and more energy. This plays a part in global warming. It’s something we don’t think about each time we turn on our TV or charge our cell phone. But we can reduce our energy use and, in turn, help protect the environment. And it doesn’t mean giving up all those electronic products.

Welcome to EPA’s ENERGY STAR Consumer Electronics broadcast, our series that looks at ways to satisfy our growing fascination with the latest in technology while protecting the environment. I’m Andrew Fanara with the United States Environmental Protection Agency and the ENERGY STAR program. Today we bring you the third of three podcasts. We’ll talk about practical ways that you can reduce your energy use without giving up the products that you love. With me today are Mark Sharp of the Panasonic Corporation and Noah Horowitz from the Natural Resource Defense Council. Thank you both for being here.

MARK SHARP: Thank you.

ANDREW FANARA: Great.

NOAH HOROWITZ: Thanks.

ANDREW FANARA: Well, let’s see here. The average American has five external power adapters in their home, and probably at least that in their office. Those are power cords that charge your laptop, your mobile phone, your MP3 player, and many, many other devices, power tools and the like. These are good examples of the growth of consumer electronics last year. In fact, the consumer electronics industry grew by about 11 percent last year and is expected to grow another 8 percent this year. And that’s certainly robust levels when you consider that the industry as a whole is about $135 billion in sales.

So let’s start off by asking Mark if you can talk about why we have so many of these gadgets in our homes and how manufacturers like Panasonic are trying to make them more efficient.

MARK SHARP: Well, thank you, Andrew. Glad to be here today. And I am very happy that you’re not encouraging people to give up all these electronics products. As a leading manufacturer, we’re very happy to sell them. And, you know, we view this as an evolution of lifestyles. And consumers today, with the 24/7 lifestyle, they’re demanding more and more electronics products. And consequently, as you correctly cited, there’s more energy use associated with these products.

As a manufacturer, Panasonic is very driven to produce more efficient products for a variety of reasons. I mean, obviously we have a commitment to preserve the environment, and certainly we view that as paramount. But we also have some design reasons for making more efficient products. Typically products that are less energy efficient or have some sort of energy loss tend to operate more warmly. And consequently that shortens the lifespan of the product and its longevity. So we really try to design products with an eye towards more efficient use of energy, which not only helps the products last longer, but also, surprisingly, using more efficient components can help drive the price down of manufacturing. So there’s a lot of incentives for manufacturers such as us to make more efficient products

.

ANDREW FANARA: So I know — this is something that’s I find fascinating. So increasingly it would be fair to say that the better environmental product, or energy-efficient product, might actually be the, maybe in many instances, the better designed product because efficiency was thought of at the institutional design sort of part of the process.

MARK SHARP: That’s absolutely correct. The engineers today, when they design a new product, one of the facets they look at in addition to the functionality that consumers demand is that the product be more efficient than its predecessors. I think you will find across the entire spectrum of products in the CE categories that they are much more efficient today than they were three years ago, two years ago, even last year’s models. And that progression towards more efficient products continues. And that’s a good thing, obviously, for the environment. And I think consumers also benefit, whether they realize it or not, that the products that they’re replacing invariably are more efficient today. So that’s good news.

ANDREW FANARA: Yeah, absolutely. I know I saw a great ad, some maybe in the last year or so, actually from Cisco. And Cisco’s ad was a picture of a very bucolic cul-de-sac in probably Anywhere, U.S.A. And the heading underneath it was "Office Park." And of course it was a residential setting. And I think the point they were trying to make is that the all of these devices, many of which are used for work and communication and whatnot, really are making our life a lot more different than it used to be from the standpoint of how we use products and the utilization we get out of them. And so interesting in different trends. You know, I’d be interested to know if, as a Japanese company, you know, sort of the role or ethos that your company might have in terms of environment and how that has sort of maybe driven some of your decisions.

MARK SHARP: Well, that’s a good point you raise, Andrew. In Japan they do actually have more stricter energy efficiency laws that we do not have here in the U.S. And consequently, manufacturers obviously are driven to meet these more stringent requirements and develop more efficient products. And it’s kind of, in my experience in a number of visits, it is ingrained in the culture to try to conserve energy in many different ways. And certainly by using less energy in the home, perhaps in a passive manner, by having just more efficient electronics products is something that they all appreciate. And we could learn a lot from their…

ANDREW FANARA: Yeah, and I suppose energy is more expensive. I mean, Japan imports virtually all of their energy. Do you think, if the day comes when, if we continue to see the prices of all forms of energy, not only home electricity but gasoline and everything else, continue to grow, albeit even slowly, do you think that’s the thing that ultimately will cause consumers to pay more attention?

MARK SHARP: Well, that certainly could be a driver. As you’re well aware, consumer awareness of the amount of energy used by consumer electronics products is fairly low. So, you know, there is an education process that we need to go through first. And, you know, it’s a situation where a lot of these products individually, and even in your household, they don’t use as much energy as you might — excuse me — expect. However, in the aggregate, and we have to look at things in this way, if every household uses just 1 percent more energy, the cumulative effect is great. So, you know, I think consumers are becoming — have a greater awareness in the future, and they’re becoming more concerned with this. And, you know, hopefully higher energy prices, if they do come to pass, which is probably a reasonable expectation, that will drive consumer behavior.

ANDREW FANARA: Right. Noah, you…

NOAH HOROWITZ: Hey, Andrew? This is Noah. I want to applaud Marc’s company and other companies for being leaders on energy efficiency. But that doesn’t represent the total picture. There’s still many products out there that are energy hogs, and not all of them are reducing their energy use. And I’d like to tell a quick story. I went to the Consumer Electronics Show a couple of years ago. NRDC had done a study, and we found that many of the very large high-definition TVs could use as much as 500 kilowatt hours per year, which is the same as a new refrigerator. And we don’t think any consumers know that, and they might be spending 3 to $500 to power that device over its ten-year life.

So I went around to the Consumer Electronics Show to all the different booths of every manufacturer and said, could you tell me how much energy your TV uses? And they couldn’t answer me. And they said, oh, but we have the 60-inch one here, and we’re going to have a 70-inch screen next year. And then I finally got one company, and they said, oh, you want to talk about power? Hold on. And they got the engineer, after my waiting ten minutes, said, oh, this is very powerful. So I think we still have a long way to go. Things are getting better, but energy is typically not at the top of the list of these manufacturers who are designing the products. And set-top boxes are probably the most symbolic here. Those things continue to chug away at full power at 3:00 in the morning.

ANDREW FANARA: Yeah, tell people what a set-top box is.

NOAH HOROWITZ: Sure. So if you have — many people are familiar with TiVo, where you can automatically record and save shows. Those things use 30 watts of power all day long. So even at — there’s no way for you to turn it off or to have it go into a low power mode in the middle of the night. And these things are starting to represent computers. They have a hard drive in there, and a modem, and things like that. So we need this energy efficiency to move towards a lot of these other devices in the home.

ANDREW FANARA: Yeah, absolutely.

MARK SHARP: Well, I don’t disagree with Noah’s observations, although I would try to put a little perspective, at least on one example. When Noah mentions the large-screen or flatscreen technology, if we go by the numbers that you cited of $500 over the life of a product additional energy cost, assuming the products last a minimum ten years, you’re talking $50 a year. And, you know, it ends up being relatively small amount in the consumer pocketbook. Obviously, any additional energy use is of concern in terms of the overall, you know, drain on our society energy reserves. But it may not be as great as people might fear.

ANDREW FANARA: Yeah, I think, you know, from our — from my perspective, Marc, I know that we certainly have seen a proliferation of devices. Many of them oftentimes are fairly inefficient. And collectively, you’re right, it may be not much per product. But certainly it’s starting to add up to the point where the amount of energy consumed by many of these miscellaneous devices — and granted, many of them are not consumer electronics devices, but they’re other miscellaneous devices in the home — it’s the only piece of the pie that’s really growing quite rapidly.

Now, yes, there are a few more lights in the average home because the average home has gotten a little bit bigger over the last 20 years, and that means a little bit more air-conditioning, etcetera. But one of the things that has kept in check much of the growth of the traditional energy uses — air-conditioning, heating, appliances and the like — are the fact that there are standards in place, and so that obviously encourage a minimum efficiency for products that can be sold in the U.S. For many of these miscellaneous devices, really the only game in town right now is at least is ENERGY STAR. And I know that you have been — your company, Panasonic, is probably more than any other company has more models and more different types of products in our program.

Tell me, does your company makes so many different things, does the concern about energy, does that extend to all the different types of devices and products that you make? And maybe you could just give people a flavor of just what types of products we’re talking about at Panasonic.

MARK SHARP: Well, we — I checked before coming over here today, and I think our latest count we had roughly about 325 models that qualified for ENERGY STAR. And we’re obviously very proud of that fact. And that’s across 14 different product categories. And it includes compact fluorescent lamps, it includes ventilation fans, as well as the consumer electronics products that you normally associate with us, the TVs and DVD players, etcetera. And it’s — we don’t design — ENERGY STAR is a really important component from the standpoint of educating consumers.

And something that I think needs to be said is, because of ENERGY STAR in part, when we design products, we do so for a global market. And to the extent that the ENERGY STAR program is accepted internationally, it’s very helpful because it helps differentiate our products from our competition. And quite frankly, you know, the competition in consumer electronics is very severe. And we’re always looking for a way to set our product apart from others. You know, we like to think we offer good value. But in reality, most products offer similar features. So if you can offer the a consumer the savings by showing that you’re ENERGY STAR qualified, I think that’s a value that consumers will increasingly place some, you know, interest in.

ANDREW FANARA: Yeah. Noah, what are you hearing from your perspective from, you know, an environmental organization about consumer attitudes and the differentiation that’s necessary for people to pick up on the more efficient product?

NOAH HOROWITZ: I guess a good trend is consumers are increasingly — or just the general public, outside the U.S. and now inside the U.S., recognize that global warming is real and isn’t going to go away. And I think the unfortunate impacts of Hurricane Katrina brought global warming a reality to folks. So increasingly, people are saying, what can I do? How can I make a difference? People often focus on their cars, and people are increasingly looking at hybrids and other technologies. But as you pointed out earlier, people have a greater environmental impact simply by the products they use in their home. So having them buy ENERGY STAR is a great first start there.

ANDREW FANARA: Yeah, and I know — returning to cars and TVs because I firmly believe it’s the two products that people pay the most attention to, given that Panasonic has such large market share, I’d be remiss if I didn’t mention that Panasonic has, I think in many regards, noticed and dealt with many of their TVs that used quite a bit of energy, and they’ve made significant improvements over that. And so just wanted to ask you, Marc, you know, whether or not that’s something that you guys are proud of.

MARK SHARP: Yeah, no, I appreciate your acknowledgment of that fact. Our current line of plasma televisions, the VIERA line, uses anywhere from 15 to 35 percent less energy than its predecessor model from a year ago. So they are becoming increasingly efficient. Obviously they’ll still use more energy than a 27-inch TV. I mean, that’s intuitive. But we recognize that the growth of energy use needs to be slowed. So we’re really dedicating our resources, not only to improving the products, the picture and things like that that the consumers demand, but also trying to reduce the amount of energy used by the product.

ANDREW FANARA: Yeah, what sorts of things might a shopper expect when they go into a retail environment and buy a Panasonic product? Will there be information that they — that will help sort of improve their IQ about the energy that’s being used, or give them some useful facts to better understand how to better use it?

MARK SHARP: Well, sadly, and it pains me to say this a little bit, in the retail environment there isn’t as much information about the products’ energy use as perhaps there could be. And certainly there’s room for improvement, and hopefully with the ENERGY STAR program’s continued growth we can make some strides in that area. But generally when a consumer goes into a retail setting and looks at televisions, for example, they tend to be displayed in a manner where the picture is the brightest, most vivid, to catch their eye. And there is very little focus, if any, on the energy consumption. And it’s incumbent upon a consumer, really, to either ask questions or contact manufacturers directly to try to get this type of information.

ANDREW FANARA: What’s going to change that behavior on the part of at least some consumers, Noah?

NOAH HOROWITZ: Well, let me give you an anecdote. I spend roughly — once a week I go to CompUSA for lunch to do mystery shopping. Which I recommend for some people, not everyone. But I walked around, and there’s no information, as Mark said, on the store. How does a consumer know how much energy, let alone how much carbon, using that product involves, or is this one more efficient than that one.

So I took a look. I’m considering getting a home network myself. And I looked at the routers, and all it said was "Always on, always connected." And there’s no information on the power use of the device, even in the fine print, in the specs. So that’s a problem, and we need to work with the Best Buys and the Wal-Marts and the manufacturers to find how do we get more information into the hands of the consumer. So all things being equal, the motivated consumer, how do they find the one that will cost less to operate and have a smaller impact on the environment?

ANDREW FANARA: Yeah, I know from our perspective here at ENERGY STAR we work very closely with many retailers throughout the country because they are looking for a way to try to differentiate products to their customers. And it’s clear that they are wrestling with this issue of energy because it is a new sort of element that they’re really maybe not used to dealing with in terms of the normal sort of attributes that they sell by. And making the connection between getting the manufacturer to provide information about the energy consumed by the product and getting retailers to understand that and to communicate that in an effective way is challenging. Although I think it’s really beginning to change in the retail environment.

And I think retailers, like manufacturers, are trying to find a way to differentiate themselves. And for many consumers across this country, as energy bills have eaten into their disposable income, albeit slowly but surely, but it is starting to happen as the gasoline bill and the home heating and cooling bill and also just the utility bills in general have begun to eat away a little bit at that, consumers, or I should say retailers, recognize that. And they are beginning to sense the impacts, even at the margins. And they’re trying to find ways to offer more efficient products to their customers because I think that builds loyalty. And long term I think that’s a wise investment on the part of the retailers. But it does certainly take the consumer on occasion, you know, being inquisitive and asking the questions that have to be asked if there is no — if there is nothing like an ENERGY STAR to for them to gravitate towards. So…

NOAH HOROWITZ: Andrew, if I can add the example of computers, computer energy use is going to, in the near future, going to go down quite a bit simply by having manufacturers use a more efficient power supply that converts the AC power to DC power that the device uses. That’s inside the computer. The consumer has no idea about that. By simply shifting to power supplies that are 80 percent or more efficient, we’re going to cut computer power use considerably.

And again, how does this all add up? Once we move to these more efficient computers, it’s going to be the equivalent of taking all the cars off the road from Chicago, from a carbon tailpipe point of view. So this is an example of how we can help save consumers money and also help protect the environment.

ANDREW FANARA: Yeah, I think that’s a great point about computers. And I guess the other anchor device in the home these days is the television. And there doesn’t seem to be anything that is going to displace that anytime soon. And it probably, combined with the computer, I would imagine, is the big drivers of efficiency or, excuse me, of consumption, in part because of all the constellation of devices that go along with them. And when you add on top of that the opportunities for game consoles and new types of content and DVDs and whatnot, the number of hours that people utilize these products is growing. And that certainly makes our life a lot richer.

But as they become staples in our lives, we certainly need to let consumers know that, when they’re looking for and trying to make a smart purchasing decision, hopefully they will look for products that carry the ENERGY STAR label. And manufacturers that participate in our program, I hope — I’m looking at Mark — certainly I think do benefit because they do — they’re able to provide some level of differentiation vis-à-vis their competitors.

MARK SHARP: That’s a good point, Andrew. And I, you know, I would — to Noah’s earlier point, you know, the computer example obviously is a really good example. However, there is, you know, sort of a completely opposite trend. As computers get smaller, as people gravitate toward laptops replacing their desktops, you would expect to some extent energy use would decline.

However, consumers are demanding and increasingly buying larger and larger screens, trying to convert their homes into home theater settings. And therefore it’s a big challenge for manufacturers like Panasonic to, you know, put a check on energy use, the growth of energy use, while consumers at the same time want these larger and bigger screens.

ANDREW FANARA: Yeah, and I would think that we certainly don’t want to tell people to not buy them, we just want them to be able to factor into the buying equation something having to do with energy, the cost of it or something thereabouts.

NOAH HOROWITZ: Yeah, we’re all about innovation, as well. And all these features are great for the consumers. What we need to do is make sure energy efficiency and — that these products are optimized for them. And some of these trends have pretty frightening environmental implications. So, for example, there’s a race within the different industries, it’s unclear who’s going to win, but you’re increasingly going to be able to download content. You know, the old "Leave It to Beaver" episode, or a movie that was just released today, you’re going to be able to download that. And that’s going to cause a lot of information to flow into your home. And that, in turn, has a lot of energy implications at the head end. So from — the Comcasts of the world are going to be putting in racks and racks of computers to feed you that content. And we need to make sure that at that side of things that we do that as efficiently as possible, as well.

ANDREW FANARA: Well, on that note, I think that’s a good point, Noah. And I think it identifies an important trend, which is our world is becoming increasingly sophisticated, and yet reliant on technology. And I think it’s certainly improved all of our — the quality of our lives, and that’s certainly been a good thing. But with that path comes implications for energy use. And we need to pay attention to every energy-consuming sort of device, because every one of them represents an opportunity for us to do something better for the environment.

So with that I would like to wrap it up today. I’d like to thank Mark and Noah for joining me, and hope we provided you with some good information on how you can start to save energy, money, and help protect the environment. Thank you very much for joining ENERGY STAR, and we look forward to talking to you again.

To comment on this podcast or for more information on consumer electronics and the energy they use, visit the ENERGY STAR website at www.energystar.gov.