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Energy Conservation in the United States: Understanding its Role in Climate Policy

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Gilbert E. Metcalf

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Abstract

Efforts to reduce carbon emissions significantly will require considerable improvements in energy intensity, the ratio of energy consumption to economic activity. Improvements in energy intensity over the past thirty years suggest great possibilities for energy conservation: current annual energy consumption avoided due to declines in energy intensity since 1970 substantially exceed current annual domestic energy supply. While historic improvements in energy intensity suggest great scope for energy conservation in the future, I argue that optimistic estimates of avoided energy costs due to energy conservation are likely biased downward. I then analyze a data set on energy intensity in the United States at the state level between 1970 and 2001 to disentangle the key elements of energy efficiency and economic activity that drive changes in energy intensity.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12272.

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Date of creation: Jun 2006
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Handle: RePEc:nbr:nberwo:12272

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Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Brown, Marilyn A., 2001. "Market failures and barriers as a basis for clean energy policies," Energy Policy, Elsevier, vol. 29(14), pages 1197-1207, November. [Downloadable!] (restricted)
  2. Maximilian Auffhammer & Ralf Steinhauser, 2006. "The Future Trajectory of US CO2 Emissions: The Role of State vs. Aggregate Information," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series 1015, Department of Agricultural & Resource Economics, UC Berkeley. [Downloadable!]
  3. Hassett, Kevin A & Metcalf, Gilbert E., 1996. "Can irreversibility explain the slow diffusion of energy saving technologies?," Energy Policy, Elsevier, vol. 24(1), pages 7-8, January. [Downloadable!] (restricted)
  4. Isamu Matsukawa, 2004. "The Effects of Information on Residential Demand for Electricity," The Energy Journal, International Association for Energy Economics, vol. 25(1), pages 1-18.
  5. Paul Diederen & Frank van Tongeren & Hennie van der Veen, 2003. "Returns on Investments in Energy-saving Technologies Under Energy Price Uncertainty in Dutch Greenhouse Horticulture," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 24(4), pages 379-394, April. [Downloadable!] (restricted)
  6. Brown, Marilyn A. & Levine, Mark D. & Short, Walter & Koomey, Jonathan G., 2001. "Scenarios for a clean energy future," Energy Policy, Elsevier, vol. 29(14), pages 1179-1196, November. [Downloadable!] (restricted)
  7. Gale A. Boyd & Joseph M. Roop, 2004. "A Note on the Fisher Ideal Index Decomposition for Structural Change in Energy Intensity," The Energy Journal, International Association for Energy Economics, vol. 25(1), pages 87-102.
  8. Wirl, Franz, 1999. "Conservation Incentives for Consumers," Journal of Regulatory Economics, Springer, vol. 15(1), pages 23-40, January. [Downloadable!] (restricted)
  9. David S. Loughran & Jonathan Kulick, 2004. "Demand-Side Management and Energy Efficiency in the United States," The Energy Journal, International Association for Energy Economics, vol. 25(1), pages 19-44.
  10. Ronald J. Sutherland, 1994. "Income Distribution Effects of Electric Utility DSM Programs," The Energy Journal, International Association for Energy Economics, vol. 15(4), pages 103-118.
  11. Pizer, William, 2005. "The Case for Intensity Targets," Discussion Papers dp-05-02, Resources For the Future. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chintrakarn, Pandej & Millimet, Daniel, 2006. "Subnational Trade Flows and State-Level Energy Intensity," Departmental Working Papers 0601, Southern Methodist University, Department of Economics. [Downloadable!]
  2. Gilbert Metcalf, 2008. "Using Tax Expenditures to Achieve Energy Policy Goals," Discussion Papers Series, Department of Economics, Tufts University 0715, Department of Economics, Tufts University. [Downloadable!]
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  3. Levinson, Arik, 2007. "Technology, International Trade, and Pollution from U.S. Manufacturing," Discussion Papers dp-07-40, Resources For the Future. [Downloadable!]
    Other versions:
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