Our paper provides a quantitative analysis of market behavior for the purchase of energy efficiency in residential appliances and heating and cooling equipment. Accurate forecasts of residential energy use require quantitative assessments of market decisions about energy efficiency. The results of our investigation of market behavior can lead to a better understanding of the barriers to investment in energy conservation. Understanding market behavior over time is a prerequisite to an evaluation of the need for and the importance of policies to promote energy efficiency.

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Meeting a greenhouse gas (GHG) reduction target of 80% below 1990 levels in the year 2050 requires detailed long-term planning due to complexity, inertia, and path dependency in the energy system. A detailed investigation of supply and demand alternatives is conducted to assess requirements for future California energy systems that can meet the 2050 GHG target. Two components are developed here that build novel analytic capacity and extend previous studies: (1) detailed bottom-up projections of energy demand across the building, industry and transportation sectors; and (2) a high-resolution variable renewable resource capacity planning model (SWITCH) that minimizes the cost of electricity while meeting GHG policy goals in the 2050 timeframe. Multiple pathways exist to a low-GHG future, all involving increased efficiency, electrification, and a dramatic shift from fossil fuels to low-GHG energy. The electricity system is found to have a diverse, cost-effective set of options that meet aggressive GHG reduction targets. This conclusion holds even with increased demand from transportation and heating, but the optimal levels of wind and solar deployment depend on the temporal characteristics of the resulting load profile. Long-term policy support is found to be a key missing element for the successful attainment of the 2050 GHG target in California.

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Human habitations require energy and water, which are increasingly interdependent. Energy systems have changed from using water for mechanical energy to building dams to provide irrigation water for agriculture and hydroelectricity. Large volumes of water are required to cool thermal electricity-generating stations—whether coal, natural gas, nuclear, or solar powered. Changes in cooling technology are reducing water withdrawals while increasing water consumption. Water produced from fossil fuel production represents environmental challenges and supply opportunities. Some renewable energy sources, such as wind turbines and photovoltaics, have far lower water requirements. Increasing development of biofuels creates a direct connection between water and energy systems. Energy, mostly for pumps, is necessary for supplying potable water and treating wastewater. Pumping from deeper underground as well as removing more contaminants (e.g., medicines, agricultural chemicals) and salt requires more energy. Water and wastewater treatment can dominate electricity demand in municipalities. Water reuse requires energy for treatment and pumping. Life cycle assessments and integrated resource planning strive to account for the total impacts.