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The effect of ESCOs on carbon dioxide emissions

  • WenShwo Fang

    (Feng Chia University)

  • Stephen M. Miller

    (University of Nevada, Las Vegas and University of Connecticut)

Proponents of energy service companies (ESCOs) argue that these firms provide a crucial instrument for delivering improved energy efficiency in public and private sectors, thus contributing to carbon dioxide (CO2) emissions reduction around the world. Do ESCOs reduce CO2 emissions? To answer this question, we develop an estimating equation, which approximates the IPAT model, from a simple model of production. Based on the modified dynamic IPAT model, using the panel data of 129 countries over the period 1980 to 2007, we provide significant evidence to show that the ESCOs effectively reduce CO2 emissions and this effect increases over time. These findings also prove robust to the inclusion of a set of control variables, different dates of the first ESCO, and the Kyoto Protocol. Finally, we discuss energy policy implications.

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File URL: http://web2.uconn.edu/economics/working/2012-14.pdf
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Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2012-14.

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Length: 31 pages
Date of creation: Aug 2012
Date of revision:
Publication status: Forthcoming in Applied Economics
Handle: RePEc:uct:uconnp:2012-14
Contact details of provider: Postal: University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063
Phone: (860) 486-4889
Fax: (860) 486-4463
Web page: http://www.econ.uconn.edu/

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