Energy Efficiency: Economics and Policy

Abstract

Energy efficiency and conservation are major factors in the reduction of the environmental impact of the energy sector, particularly with regard to climate change. Energy efficiency also contributes to reducing external dependence and vulnerabilities in the energy domain. In this paper, we discuss the factors that influence energy efficiency and conservation decisions, and the most appropriate policies for their promotion. Although not all public policies seem justified, we argue that specific policies for promoting energy conservation may be required, preferably based on economic instruments or on the provision of information to consumers.

Pro-environmental Households and Energy Efficiency in Spain

“…(see e.g. Gillingham et al, 2006Gillingham et al, , 2009Levine et al, 2007;Linares and Labandeira, 2010;Ryan et al, 2011, Gago et al, 2013. However, these policies are unlikely to be successful unless they are designed with good knowledge of the residential market.…”

Determinants of energy efficiency investments in the US

“…Energy efficiency may also enable highly significant cost reductions to be made in most public and private activities, but the truth is that many private investments which are more than justified in economic terms are simply not made. This is known as the "energy efficiency paradox" (Jaffe et al 2004, Linares andLabandeira 2010), and can be explained by barriers such as insufficient information, the "principal-agent" problem, difficulties in gaining access to capital and even divergence between private and social discount rates.…”

People or places? Factors associated with the presence of domestic energy efficiency measures in England.

“…this, there may be other market failures which mean that measures which appear to be privately optimal to install are not taken up (see Levine et al, 1994 andLinares andLabanderia, 2010). Of particular interest for this study are two economic market failures:…”