There exist some possible synergies between energy efficiency measures and renewable energy adoption in the sense that the former reduces the energy demand so that the latter can begin to cut future GHG emissions with a high potential in residential sector. In this residential sector, many works have been done either on demand for clean energy or on investment in energy efficiency, but to our knowledge there is no specific study that investigates the interaction between the two decisions. This paper fills this gap in literature and first theoretically shows that there exist interactions between the two decisions depending on a threshold on the pro-environmental index of the consumer. Second, the paper empirically shows that the two decisions are positively interrelated and cannot be estimated independently. As a result, univariate methods that estimate separately the two decisions of renewable energy adoption and investment in energy efficiency potentially produce biased results because it may exist unobserved characteristics that determine both decisions. Third, the paper investigates characteristics of the household that significantly affect the interaction between the two decisions by using generalized ordered logit model. More precisely, the paper provides evidence on factors that affect the joint probability of adopting renewable energy and investing in energy efficiency and the probability of doing nothing. This contribution can serve to define incentive policies to boost the energy transition.

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In this paper, we analyze the optimal energy transition of a two-sector economy (energy and final goods) with exhaustible oil reserves, a renewable source of energy and a pollution threat. The latter corresponds to a pollution threshold above which a part of the capital is lost (following flooding for instance). We show that the optimal energy transition path may correspond to a corner regime in which the economy starts using both resources, then crosses the pollution threshold and therefore loses a part of its capital. At the end, the sole adoption of the renewable energy is optimal only in the long run. This result is in line with the asymptotic energy transition arguments stating that the transition to "clean" energy may happen only in the long run. We also show that economy reduces the use of energy resource as long as the productivity of capital and energy services is high. Therefore, public policies should promote investments in energy innovation that targets productive sector, home appliances and buildings and helps to save both money and energy. We extend the present model to allow for additional investment in energy saving technologies. Our main results show that this additional investment favours the energy transition in the sense that it increases the time within which the economy may experience the catastrophe and the welfare of the society. For policy implications, economic instruments such as taxes on "dirty" energy, subsidies on "clean" energy or incentives for energy saving technologies need to be implemented in order to promote the energy transition. This is particularly important for developing countries that mostly rely on polluting energy resources and are the most vulnerable to climate change. But those economic instruments should be carefully designed in line with the asymptotic energy transition result.

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