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Energy-Efficiency Investments and Public Policy

Adam B. Jaffe and Robert N. Stavins

Year: 1994
Volume: Volume15
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol15-No2-3
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Abstract:
Concern about carbon dioxide as a greenhouse gas has focused renewed attention on energy conservation because fossil fuel combustion is a major source of CO2 emissions. Since it is generally acknowledged that energy use could be significantly reduced through broader adoption of existing technologies, policy makers need to know how effective various policy instruments might be in accelerating the diffusion of these technologies. We examine the factors that determine the rate of diffusion, focusing on (i) potential market failures: information problems, principal-agent slippage, and unobserved costs, and (ii) explanations that do not represent market failures: private information costs, high discount rates, and heterogeneity among potential adopters. Through a series of simulations we explore how alternative policy instruments--both economic incentives and more conventional, direct regulations-could hasten the diffusion of energy-conserving technologies.



Demand-Side Management and Energy Efficiency in the United States

David S. Loughran and Jonathan Kulick

Year: 2004
Volume: Volume 25
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol25-No1-2
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Abstract:
Between 1989 and 1999, U.S. electric utilities spent $14.7 billion on demand-side management (DSM) programs aimed at encouraging their customers to make investments in energy efficiency. This study relies on panel data on 324 utilities spanning 11 years to estimate the effect of DSM expenditures on retail electricity sales. Our estimates imply that DSM had a much smaller effect on retail electricity sales than do estimates reported by utilities themselves over the same study period.





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