Is There An Energy Efficiency Gap?
Originally published January 17, 2012. Revised July 19, 2012.
| Main Authors: | , |
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| Format: | Working Paper |
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Cambridge, MA: Department of Economics, Massachusetts Institute of Technology
2012
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| Subjects: | |
| Online Access: | http://hdl.handle.net/1721.1/71853 |
| _version_ | 1826199397941116928 |
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| author | Allcott, Hunt Greenstone, Michael |
| author_facet | Allcott, Hunt Greenstone, Michael |
| author_sort | Allcott, Hunt |
| collection | MIT |
| description | Originally published January 17, 2012. Revised July 19, 2012. |
| first_indexed | 2024-09-23T11:19:17Z |
| format | Working Paper |
| id | mit-1721.1/71853 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T11:19:17Z |
| publishDate | 2012 |
| publisher | Cambridge, MA: Department of Economics, Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/718532019-04-11T07:47:07Z Is There An Energy Efficiency Gap? Allcott, Hunt Greenstone, Michael energy efficiency market failures externalities energy policy imperfect information investment inefficiencies Originally published January 17, 2012. Revised July 19, 2012. Many analysts have argued that energy efficiency investments offer an enormous “win-win” opportunity to both reduce negative externalities and save money. This overview paper presents a simple model of investment in energy-using capital stock with two types of market failures: first, uninternalized externalities from energy consumption, and second, forces such as imperfect information that cause consumers and firms not to exploit privately-profitable energy efficiency investments. The model clarifies that only if the second type of market failure cannot be addressed directly through mechanisms such as information provision, energy efficiency subsidies and standards may be merited. We therefore review the empirical work on the magnitude of profitable unexploited energy efficiency investments, a literature which frequently does not meet modern standards for credibly estimating the net present value of energy cost savings and often leaves other benefits and costs unmeasured. These problems notwithstanding, recent empirical work in a variety of contexts implies that on average the magnitude of profitable unexploited investment opportunities is much smaller than engineering-accounting studies suggest. Finally, there is tremendous opportunity and need for policy-relevant research that utilizes randomized controlled trials and quasi-experimental techniques to estimate the returns to energy efficiency investments and the welfare effects of energy efficiency programs. 2012-07-26T19:34:09Z 2012-07-26T19:34:09Z 2012-01-17 Working Paper http://hdl.handle.net/1721.1/71853 Working paper, Massachusetts Institute of Technology, Dept. of Economics; http://hdl.handle.net/1721.1/69591 http://hdl.handle.net/1721.1/69591 An error occurred on the license name. An error occurred getting the license - uri. application/pdf Cambridge, MA: Department of Economics, Massachusetts Institute of Technology |
| spellingShingle | energy efficiency market failures externalities energy policy imperfect information investment inefficiencies Allcott, Hunt Greenstone, Michael Is There An Energy Efficiency Gap? |
| title | Is There An Energy Efficiency Gap? |
| title_full | Is There An Energy Efficiency Gap? |
| title_fullStr | Is There An Energy Efficiency Gap? |
| title_full_unstemmed | Is There An Energy Efficiency Gap? |
| title_short | Is There An Energy Efficiency Gap? |
| title_sort | is there an energy efficiency gap |
| topic | energy efficiency market failures externalities energy policy imperfect information investment inefficiencies |
| url | http://hdl.handle.net/1721.1/71853 |
| work_keys_str_mv | AT allcotthunt isthereanenergyefficiencygap AT greenstonemichael isthereanenergyefficiencygap |