IDEAS home Printed from https://ideas.repec.org/a/aen/journl/ej41-3-boy.html

Relative Effectiveness of Energy Efficiency Programs versus Market Based Climate Policies in the Chemical Industry

Author

Listed:
  • Gale A. Boyd and Jonathan M. Lee

Abstract

This paper addresses the relative effectiveness of market vs program based climate policies. We compute the carbon price resulting in an equivalent reduction in energy from programs that eliminate the efficiency gap. A reduced-form stochastic frontier energy demand analysis of plant level electricity and fuel data, from energy-intensive chemical sectors, jointly estimates the distribution of energy efficiency and underlying price elasticities. The analysis obtains a decomposition of efficiency into persistent (PE) and time-varying (TVE) components. Total inefficiency is relatively small in most sectors and price elasticities are relatively high. If all plants performed at the 90th percentile of their efficiency distribution, the reduction in energy is between 4% and 37%. A carbon price averaging around $31.51/ton CO2 would achieve reductions in energy use equivalent to all manufacturing plants making improvements to close the efficiency gap.

Suggested Citation

  • Gale A. Boyd and Jonathan M. Lee, 2020. "Relative Effectiveness of Energy Efficiency Programs versus Market Based Climate Policies in the Chemical Industry," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 39-62.
    • Handle: RePEc:aen:journl:ej41-3-boy
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=3501
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gale Boyd & Matt Doolin, 2020. "The Energy Efficiency Gap and Energy Price Responsiveness in Food Processing," Working Papers 20-18, Center for Economic Studies, U.S. Census Bureau.
    2. Gechert, Sebastian & Mey, Bianka & Prante, Franz & Schäfer, Teresa, 2025. "The Price Elasticity of Heating and Cooling Energy Demand," OSF Preprints 4sjy5_v2, Center for Open Science.
    3. Xu, Bin & Lin, Boqiang, 2020. "Investigating drivers of CO2 emission in China’s heavy industry: A quantile regression analysis," Energy, Elsevier, vol. 206(C).
    4. Lee, Jonathan M. & Howard, Gregory, 2021. "The impact of technical efficiency, innovation, and climate policy on the economic viability of renewable electricity generation," Energy Economics, Elsevier, vol. 100(C).

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aen:journl:ej41-3-boy. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Williams (email available below). General contact details of provider: https://edirc.repec.org/data/iaeeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.