Energy efficiency resource standards: Economics and policy
AbstractTwenty states in the United States have adopted energy efficiency resource standards (EERS) that specify absolute or percentage reductions in energy use relative to business as usual. We examine how an EERS compares to policies oriented to meeting objectives, such as reducing greenhouse gas emissions, correcting for consumer error in energy efficiency investment, or reducing peak demand absent real-time prices. If reducing energy use is a policy goal, one could use energy taxes or cap-and-trade systems rather than an EERS. An EERS can be optimal under special conditions, but to achieve optimal goals following energy efficiency investments, the marginal external harm must fall with greater energy use. This could happen if inframarginal energy has greater negative externalities, particularly regarding emissions, than energy employed at the margin. We conclude with a table of suggestions policy makers should consider when deciding whether and how to adopt an EERS.
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Bibliographic InfoArticle provided by Elsevier in its journal Utilities Policy.
Volume (Year): 25 (2013)
Issue (Month): C ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30478
Energy efficiency resource standards; Energy efficiency; Electricity; Conservation;
Other versions of this item:
- Brennan, Timothy J. & Palmer, Karen, 2012. "Energy Efficiency Resource Standards: Economics and Policy," Discussion Papers dp-12-10, Resources For the Future.
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
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