Foreword / by Olympia J. Snowe -- Preface -- Acknowledgements -- Introduction -- Energy efficiency and the economy -- The critical role of energy efficiency in the economy -- Energy use reduction -- Environmental policies generate cost reductions -- Opposition to energy efficiency -- Establish more competitive markets -- Direct success in energy efficiency -- Early resistance to energy efficiency -- The refrigerator story -- Other energy-efficiency opportunities -- How far can we go with efficiency? -- Enhanced innovation--energy efficiency's unexpected success -- Nonenergy benefits -- Innovation, process improvement, and cost reduction -- Overcoming barriers to innovation -- National economic development policy and the environment -- Environmental protection, economic barriers, and economic development -- Economic fundamentalism--the use of economics as a religion rather than a science -- What is economic fundamentalism? -- How economic theory serves as a political force -- How critical assumptions of economic theory are violated in practice -- The need for regulation -- How markets actually work -- Lessons from California's failed experiment in "free markets" for electricity -- The road to failure -- What actually happened--myth versus reality -- The consequences of the restructuring experiment -- The true causes of the California energy crisis -- How markets fail -- What prevents expected results -- Market barriers -- Market failures -- Human failures -- Institutional failures: trade associations and the politics of environmental protection -- Factors for market success -- The politics of environmentalism -- Myths of the anti-environmentalists -- The myth of independent objective analysis -- The myths about environmentalists -- The consequences of the anti-environmentalist myth -- Myths of the environmentalists -- The greedy corporation myth -- The "bad people" myth -- The "small is beautiful" myth -- Legitimate concerns of business and environmental interests -- Business's concerns about new regulation -- Reasons why business distrusts environmentalists -- Environmentalists' concerns about business -- The need for better communication -- What truly motivates anti-environmentalists -- A story of energy efficiency and global warming -- The influence of economic and ideological incumbency -- Who writes the regulations -- Government versus private-sector regulation -- Well-designed environmental policies -- Current environmental policies -- Future environmental policies -- Where do we go from here? -- Environmental policy promotes economic growth -- Current barriers to environmental policies -- How to transform the political debate -- Incentives and regulation -- Appendix: Myths and realities in California's experiment in electricity -- Myth 1: Hugh growth of demand for electricity -- Myth 2: Environmentalists and state bureaucrats blocked new power plant construction -- Myth 3: Greedy utilities used restructuring as a plot -- Myth 4: The flaws of restructuring were clear to all -- Myth 5: Restructuring did not go far enough -- Myth 6: The "genius of the market" will solve everything -- Notes -- Bibliography -- Index.