IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Energy efficiency: Economics and Policy

  • Xavier Labandeira


    (Rede (Universidade de Vigo) and Economics for Energy)

  • Pedro Linares


    (Universidad Pontificia Comillas and Economics for Energy)

Energy efficiency and conservation are major factors in the reduction of environmental impact of the energy sector, particularly with regard to climate change. Energy efficiency also contributes to reducing external dependence and vulnerabilities in the energy domain. In this paper we discuss the factors that influence energy efficiency and conservation decisions, and the most appropriate policies for their promotion. Although not all public policies seem justified, we argue that specific policies for promoting energy conservation may be required, preferably based on economic instruments or on the provision of information to consumers.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Economics for Energy in its series Working Papers with number 05-2010.

in new window

Length: 28 pages
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:efe:wpaper:05-2010
Contact details of provider: Web page:

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.:

as in new window
  1. repec:rwi:repape:0058 is not listed on IDEAS
  2. Lawrence H. Goulder & Ian W. H. Parry & Roberton C. Williams III & Dallas Burtraw, 1998. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," NBER Working Papers 6464, National Bureau of Economic Research, Inc.
  3. Paul Joskow & Jean Tirole, 2004. "Reliability and Competitive Electricity Markets," Working Papers 0408, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  4. Hassett, Kevin A. & Metcalf, Gilbert E., 1995. "Energy tax credits and residential conservation investment: Evidence from panel data," Journal of Public Economics, Elsevier, vol. 57(2), pages 201-217, June.
  5. Lori Bennear & Robert Stavins, 2007. "Second-best theory and the use of multiple policy instruments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 111-129, May.
  6. Torstein Bye & Annegrete Bruvoll, 2008. "Multiple instruments to change energy behaviour: The emperor’s new clothes?," Discussion Papers 549, Statistics Norway, Research Department.
  7. Barker, Terry & Ekins, Paul & Foxon, Tim, 2007. "Macroeconomic effects of efficiency policies for energy-intensive industries: The case of the UK Climate Change Agreements, 2000-2010," Energy Economics, Elsevier, vol. 29(4), pages 760-778, July.
  8. repec:rwi:repape:0032 is not listed on IDEAS
  9. Paul L. Joskow & Donald B. Marron, 1992. "What Does a Negawatt Really Cost? Evidence from Utility Conservation Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 41-74.
  10. Hassett, Kevin A. & Metcalf, Gilbert E., 1993. "Energy conservation investment : Do consumers discount the future correctly?," Energy Policy, Elsevier, vol. 21(6), pages 710-716, June.
  11. Dermot Gately & Hiliard G. Huntington, 2002. "The Asymmetric Effects of Changes in Price and Income on Energy and Oil Demand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 19-55.
  12. Hausman, Jerry A & Joskow, Paul L, 1982. "Evaluating the Costs and Benefits of Appliance Efficiency Standards," American Economic Review, American Economic Association, vol. 72(2), pages 220-25, May.
  13. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy paradox and the diffusion of conservation technology," Resource and Energy Economics, Elsevier, vol. 16(2), pages 91-122, May.
  14. Mundaca, Luis, 2007. "Transaction costs of Tradable White Certificate schemes: The Energy Efficiency Commitment as case study," Energy Policy, Elsevier, vol. 35(8), pages 4340-4354, August.
  15. Metcalf, Gilbert E., 1994. "Economics and rational conservation policy," Energy Policy, Elsevier, vol. 22(10), pages 819-825, October.
  16. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
  17. Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
  18. Martin Baughman & Paul Joskow, 1975. "The Effects of Fuel Prices on Residential Appliance Choice in the United States," Land Economics, University of Wisconsin Press, vol. 51(1), pages 41-49.
  19. Lijesen, Mark G., 2007. "The real-time price elasticity of electricity," Energy Economics, Elsevier, vol. 29(2), pages 249-258, March.
  20. Fischer, Carolyn, 2008. "Emissions pricing, spillovers, and public investment in environmentally friendly technologies," Energy Economics, Elsevier, vol. 30(2), pages 487-502, March.
  21. Daan van Soest & Erwin Bulte, 2001. "Does the Energy-Efficiency Paradox Exist? Technological Progress and Uncertainty," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(1), pages 101-112, January.
  22. Andrew Caplin & John Leahy, 2001. "The social discount rate," Discussion Paper / Institute for Empirical Macroeconomics 137, Federal Reserve Bank of Minneapolis.
  23. Schipper, Lee & Ting, Michael & Khrushch, Marta & Golove, William, 1997. "The evolution of carbon dioxide emissions from energy use in industrialized countries: an end-use analysis," Energy Policy, Elsevier, vol. 25(7-9), pages 651-672.
  24. Philippe Quirion & Louis-Gaëtan Giraudet, 2008. "Efficiency and Distributional Impacts of Tradable White Certificates Compared to Taxes, Subsidies and Regulations," Working Papers 2008.88, Fondazione Eni Enrico Mattei.
  25. Banfi, Silvia & Farsi, Mehdi & Filippini, Massimo & Jakob, Martin, 2008. "Willingness to pay for energy-saving measures in residential buildings," Energy Economics, Elsevier, vol. 30(2), pages 503-516, March.
  26. Severin Borenstein & Stephen Holland, 2005. "On the Efficiency of Competitive Electricity Markets with Time-Invariant Retail Prices," RAND Journal of Economics, The RAND Corporation, vol. 36(3), pages 469-493, Autumn.
  27. Ang, B. W., 1999. "Is the energy intensity a less useful indicator than the carbon factor in the study of climate change?," Energy Policy, Elsevier, vol. 27(15), pages 943-946, December.
  28. Peter C. Reiss & Matthew W. White, 2005. "Household Electricity Demand, Revisited," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 853-883.
  29. Koomey, Jonathan G. & Sanstad, Alan H., 1994. "Technical evidence for assessing the performance of markets affecting energy efficiency," Energy Policy, Elsevier, vol. 22(10), pages 826-832, October.
  30. Woods, James, 2008. "What people do when they say they are conserving electricity," Energy Policy, Elsevier, vol. 36(6), pages 1945-1956, June.
  31. Sue Wing, Ian, 2008. "Explaining the declining energy intensity of the U.S. economy," Resource and Energy Economics, Elsevier, vol. 30(1), pages 21-49, January.
  32. Langniss, Ole & Praetorius, Barbara, 2006. "How much market do market-based instruments create? An analysis for the case of "white" certificates," Energy Policy, Elsevier, vol. 34(2), pages 200-211, January.
  33. Zhou, P. & Ang, B.W., 2008. "Decomposition of aggregate CO2 emissions: A production-theoretical approach," Energy Economics, Elsevier, vol. 30(3), pages 1054-1067, May.
  34. Boonekamp, Piet G.M., 2007. "Price elasticities, policy measures and actual developments in household energy consumption - A bottom up analysis for the Netherlands," Energy Economics, Elsevier, vol. 29(2), pages 133-157, March.
  35. Gilbert E. Metcalf, 2008. "An Empirical Analysis of Energy Intensity and Its Determinants at the State Level," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-26.
  36. David S. Loughran and Jonathan Kulick, 2004. "Demand-Side Management and Energy Efficiency in the United States," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 19-44.
  37. Roca, Jordi & Alcantara, Vicent, 2001. "Energy intensity, CO2 emissions and the environmental Kuznets curve. The Spanish case," Energy Policy, Elsevier, vol. 29(7), pages 553-556, June.
  38. Jaffe Adam B. & Stavins Robert N., 1995. "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages S43-S63, November.
  39. Hanley, Nick & McGregor, Peter G. & Swales, J. Kim & Turner, Karen, 2009. "Do increases in energy efficiency improve environmental quality and sustainability?," Ecological Economics, Elsevier, vol. 68(3), pages 692-709, January.
  40. Kevin A. Hassett & Gilbert E. Metcalf, 1997. "Measuring the Energy Savings from Home Improvements Investments: Evidence from Monthly Billing Data," Discussion Papers Series, Department of Economics, Tufts University 9701, Department of Economics, Tufts University.
  41. Sanstad, Alan H. & Howarth, Richard B., 1994. "`Normal' markets, market imperfections and energy efficiency," Energy Policy, Elsevier, vol. 22(10), pages 811-818, October.
  42. Munns, Diane, 2008. "Modeling New Approaches for Electric Energy Efficiency," The Electricity Journal, Elsevier, vol. 21(2), pages 20-26, March.
  43. Manuel Frondel & Jorg Peters & Colin Vance, 2008. "Identifying the Rebound: Evidence from a German Household Panel," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 145-164.
  44. Maximilian Auffhammer & Carl Blumstein & Meredith Fowlie, 2008. "Demand-Side Management and Energy Efficiency Revisited," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 91-104.
  45. Mizobuchi, Kenichi, 2008. "An empirical study on the rebound effect considering capital costs," Energy Economics, Elsevier, vol. 30(5), pages 2486-2516, September.
  46. Zografakis, Nikolaos & Menegaki, Angeliki N. & Tsagarakis, Konstantinos P., 2008. "Effective education for energy efficiency," Energy Policy, Elsevier, vol. 36(8), pages 3216-3222, August.
  47. Awerbuch, Shimon & Deehan, William, 1995. "Do consumers discount the future correctly? : A market-based valuation of residential fuel switching," Energy Policy, Elsevier, vol. 23(1), pages 57-69, January.
  48. Boardman, Brenda, 2004. "New directions for household energy efficiency: evidence from the UK," Energy Policy, Elsevier, vol. 32(17), pages 1921-1933, November.
  49. Grubb, M. J., 1990. "Communication Energy efficiency and economic fallacies," Energy Policy, Elsevier, vol. 18(8), pages 783-785, October.
  50. Brookes, Leonard, 2000. "Energy efficiency fallacies revisited," Energy Policy, Elsevier, vol. 28(6-7), pages 355-366, June.
  51. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
  52. Train, Kenneth, 1985. "Discount rates in consumers' energy-related decisions: A review of the literature," Energy, Elsevier, vol. 10(12), pages 1243-1253.
  53. Brons, Martijn & Nijkamp, Peter & Pels, Eric & Rietveld, Piet, 2008. "A meta-analysis of the price elasticity of gasoline demand. A SUR approach," Energy Economics, Elsevier, vol. 30(5), pages 2105-2122, September.
  54. Young, Denise, 2008. "When do energy-efficient appliances generate energy savings? Some evidence from Canada," Energy Policy, Elsevier, vol. 36(1), pages 34-46, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:efe:wpaper:05-2010. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Pablo Pintos)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.