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The Policy Implications of Energy-Efficiency Cost Curves

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  • Hillard G. Huntington

Abstract

Energy-efficiency cost curves show the required expenditures for achieving any specific reductions in energy use from the baseline level. When they are applied in a policy setting, the assumptions underlying these schedules need to be carefully evaluated if one is to derive useful conclusions. This paper begins by adopting the cost curve and underlying assumptions used in a previous and highly visible study of the economic potential for energy-efficiency improvements. Adjustments are made to the cost curve to incorporate demographic, economic and market effects that are often included in many energy-economy models. Energy efficiency tends to be more costly with the adjusted than with the original cost curves, due primarily to limits on adoption and to policy program costs. It is hoped that the exposition will allow policymakers more insight into why different results are obtained with alternative behavioral assumptions, even if the technology costs and performances are the same with both approaches. doi: 10.5547/ISSN0195-6574-EJ-Vol32-SI1-2
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Suggested Citation

  • Hillard G. Huntington, 2011. "The Policy Implications of Energy-Efficiency Cost Curves," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    • Handle: RePEc:aen:journl:32si1-a02
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    1. Gerarden, Todd D. & Newell, Richard G. & Stavins, Robert N. & Stowe, Robert C., "undated". "An Assessment of the Energy-Efficiency Gap and Its Implications for Climate Change Policy," Climate Change and Sustainable Development 202116, Fondazione Eni Enrico Mattei (FEEM).
    2. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2025. "Assessing the Energy-Efficiency Gap," World Scientific Book Chapters, in: Economics of Environment, Climate Change, and Wine Selected Papers of Robert N Stavins Volume 3 (2011–2023), chapter 4, pages 53-118, World Scientific Publishing Co. Pte. Ltd..
    3. Laslett, Dean & Carter, Craig & Creagh, Chris & Jennings, Philip, 2017. "A large-scale renewable electricity supply system by 2030: Solar, wind, energy efficiency, storage and inertia for the South West Interconnected System (SWIS) in Western Australia," Renewable Energy, Elsevier, vol. 113(C), pages 713-731.
    4. Klemick, Heather & Kopits, Elizabeth & Sargent, Keith & Wolverton, Ann, 2014. "Heavy-Duty Trucking and the Energy Efficiency Paradox," National Center for Environmental Economics-NCEE Working Papers 280918, United States Environmental Protection Agency (EPA).
    5. Heather Klemick & Elizabeth Kopits & Keith Sargent & Ann Wolverton, 2014. "Heavy-Duty Trucks and the Energy Efficiency Paradox," NCEE Working Paper Series 201402, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jan 2014.
    6. Mier, Mathias & Weissbart, Christoph, 2020. "Power markets in transition: Decarbonization, energy efficiency, and short-term demand response," Energy Economics, Elsevier, vol. 86(C).
    7. Glotin, David & Bourgeois, Cyril & Giraudet, Louis-Gaëtan & Quirion, Philippe, 2019. "Prediction is difficult, even when it's about the past: A hindcast experiment using Res-IRF, an integrated energy-economy model," Energy Economics, Elsevier, vol. 84(S1).
    8. Masahiro Sugiyama & Osamu Akashi & Kenichi Wada & Amit Kanudia & Jun Li & John Weyant, 2014. "Energy efficiency potentials for global climate change mitigation," Climatic Change, Springer, vol. 123(3), pages 397-411, April.
    9. Poponi, Daniele & Basosi, Riccardo & Kurdgelashvili, Lado, 2021. "Subsidisation cost analysis of renewable energy deployment: A case study on the Italian feed-in tariff programme for photovoltaics," Energy Policy, Elsevier, vol. 154(C).
    10. Lundmark, Robert, 2022. "Time-adjusted transaction costs for energy renovations for single-family house-owners," Energy Economics, Elsevier, vol. 114(C).
    11. Wilkerson, Jordan T. & Cullenward, Danny & Davidian, Danielle & Weyant, John P., 2013. "End use technology choice in the National Energy Modeling System (NEMS): An analysis of the residential and commercial building sectors," Energy Economics, Elsevier, vol. 40(C), pages 773-784.
    12. Klemick, Heather & Kopits, Elizabeth & Wolverton, Ann & Sargent, Keith, 2015. "Heavy-duty trucking and the energy efficiency paradox: Evidence from focus groups and interviews," Transportation Research Part A: Policy and Practice, Elsevier, vol. 77(C), pages 154-166.
    13. Ströbele Wolfgang, 2013. "Ordnungspolitische und Sachprobleme der Energiewende / Problems of the turnaround in energy policy in Germany after 2011," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 64(1), pages 253-274, January.
    14. Caroline Löffler & Harald Hecking, 2017. "Greenhouse Gas Abatement Cost Curves of the Residential Heating Market: A Microeconomic Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(4), pages 915-947, December.

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