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California energy efficiency: Lessons for the rest of the world, or not?


  • Levinson, Arik


Since the 1970s California's residential electricity consumption per capita has stopped increasing while other states’ electricity use continued to grow steadily. What accounts for California's apparent savings? Some credit the strict energy efficiency standards for buildings and appliances enacted by California in the mid-1970s. They argue that the growing gap between California and other states demonstrates that other states and countries could replicate California's gains by adopting California-style regulations, and that California should build on its own success by tightening its standards further. Skeptics might point to three long-run trends that differentiate California's electricity demand from other states: (1) shifting of the U.S. population toward 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. Today, differences in climate and demographics account for almost 90 percent of the difference between California's and other states’ residential electricity use. That difference thus provides no lessons for other states or countries considering adopting or tightening their own energy efficiency standards.

Suggested Citation

  • Levinson, Arik, 2014. "California energy efficiency: Lessons for the rest of the world, or not?," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 269-289.
  • Handle: RePEc:eee:jeborg:v:107:y:2014:i:pa:p:269-289
    DOI: 10.1016/j.jebo.2014.04.014

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    References listed on IDEAS

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    Cited by:

    1. Considine, Timothy & Manderson, Edward, 2014. "The role of energy conservation and natural gas prices in the costs of achieving California's renewable energy goals," Energy Economics, Elsevier, vol. 44(C), pages 291-301.
    2. Francisco Costa & François Gerard, 2018. "Hysteresis and the Welfare Effect of Corrective Policies: Theory and Evidence from an Energy-Saving Program," NBER Working Papers 24608, National Bureau of Economic Research, Inc.
    3. Carvallo, Juan Pablo & Murphy, Sean P. & Stuart, Elizabeth & Larsen, Peter H. & Goldman, Charles, 2019. "Evaluating project level investment trends for the U.S. ESCO industry: 1990–2017," Energy Policy, Elsevier, vol. 130(C), pages 139-161.
    4. Modeste, Kameni Nematchoua & Mempouo, Blaise & René, Tchinda & Costa, Ángel M. & Orosa, José A. & Raminosoa, Chrysostôme R.R. & Mamiharijaona, Ramaroson, 2015. "Resource potential and energy efficiency in the buildings of Cameroon: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 835-846.
    5. Maya M. Papineau, 2015. "Setting the Standard: Commercial Electricity Consumption Responses to Energy Codes," Carleton Economic Papers 15-04, Carleton University, Department of Economics.
    6. Matthew E. Kahn & Nils Kok & Peng Liu, 2016. "Is California More Energy Efficient than the Rest of the Nation? Evidence from Commercial Real Estate," NBER Working Papers 21912, National Bureau of Economic Research, Inc.
    7. Papineau, Maya, 2017. "Setting the standard? A framework for evaluating the cost-effectiveness of building energy standards," Energy Economics, Elsevier, vol. 64(C), pages 63-76.
    8. Fournier, Eric D. & Federico, Felicia & Porse, Erik & Pincetl, Stephanie, 2019. "Effects of building size growth on residential energy efficiency and conservation in California," Applied Energy, Elsevier, vol. 240(C), pages 446-452.
    9. James M. Leonhardt & David Trafimow & Mihai Niculescu, 2017. "Selecting Field Experiment Locations with Archival Data," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(2), pages 448-462, July.
    10. Thonipara, Anita & Runst, Petrik & Ochsner, Christian & Bizer, Kilian, 2019. "Energy efficiency of residential buildings in the European Union – An exploratory analysis of cross-country consumption patterns," Energy Policy, Elsevier, vol. 129(C), pages 1156-1167.
    11. Quinn Keefer & Galib Rustamov, 2018. "Limited attention in residential energy markets: a regression discontinuity approach," Empirical Economics, Springer, vol. 55(3), pages 993-1017, November.
    12. Brandi, Clara, 2017. "Handel und Umweltschutz: Chancen und Risiken," Discussion Papers 22/2017, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE).
    13. Arthur Grimes, Nicholas Preval, Chris Young, Richard Arnold, Tim Denne, Philippa Howden-Chapman, and Lucy Telfar-Barnard, 2016. "Does Retrofitted Insulation Reduce Household Energy Use? Theory and Practice," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    14. Basher, Syed Abul & Raboy, David G., 2018. "The misuse of net present value in energy efficiency standards," Renewable and Sustainable Energy Reviews, Elsevier, vol. 96(C), pages 218-225.
    15. Arik Levinson, 2014. "How Much Energy Do Building Energy Codes Really Save? Evidence from California," NBER Working Papers 20797, National Bureau of Economic Research, Inc.

    More about this item


    Energy efficiency; Regulations; Decomposition;

    JEL classification:

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


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