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California Energy Efficiency: Lessons for the Rest of the World, or Not?

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Starting in the 1970s California's residential electricity consumption per capita stopped increasing, while other states' electricity use continued to grow steadily. Similar patterns can be seen in non-electric energy, industry, and transportation. Had other states' energy use followed California's trajectory, the U.S. would have already achieved the Obama Administration’s goal of reducing U.S. greenhouse gas emissions to 17 percent below 2005 levels by 2020. What accounts for California's residential electricity savings? Some credit regulations, especially the strict energy efficiency standards for buildings and appliances enacted by California in the mid-1970s. They argue that other states and countries could replicate California's gains, and that California should build on its own success by tightening those standards further. Skeptics point to three long-run trends that differentiate California's electricity demand from other states: (1) shifting of the U.S. population towards warmer climates of the South and West; (2) relatively small income elasticity of energy demand in California's temperate climate; and (3) evolving differences between the demographics of households in California and other states. Together, these trends account for virtually all of California's apparent residential electricity savings, thus providing no lessons for other states or countries considering adopting or tightening their energy efficiency standards.

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Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~13-13-03.

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Date of creation: 03 Jan 2013
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Handle: RePEc:geo:guwopa:gueconwpa~13-13-03

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Postal: Georgetown University Department of Economics Washington, DC 20057-1036
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Postal: Marcia Suss Administrative Officer Georgetown University Department of Economics Washington, DC 20057-1036
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  1. Arik Levinson, 2001. "Energy Use By Apartment Tenants When Landlords Pay For Utilities," Working Papers gueconwpa~01-01-09, Georgetown University, Department of Economics.
  2. Kaufman, Noah & Palmer, Karen, 2010. "Energy-Efficiency Program Evaluations: Opportunities for Learning and Inputs to Incentive Mechanisms," Discussion Papers dp-10-16, Resources For the Future.
  3. Brounen, Dirk & Kok, Nils & Quigley, John M., 2012. "Residential energy use and conservation: Economics and demographics," European Economic Review, Elsevier, vol. 56(5), pages 931-945.
  4. Dora L. Costa & Matthew E. Kahn, 2010. "Why Has California’s Residential Electricity Consumption Been So Flat since the 1980s?: A Microeconometric Approach," NBER Working Papers 15978, National Bureau of Economic Research, Inc.
  5. Hunt Allcott & Michael Greenstone, 2012. "Is There an Energy Efficiency Gap?," NBER Working Papers 17766, National Bureau of Economic Research, Inc.
  6. Roland-Holst, David, 2008. "Energy efficiency, innovation, and job creation in California," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7qz3b977, Department of Agricultural & Resource Economics, UC Berkeley.
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