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Improving Energy Codes

Open Access Article

Energy codes set efficiency standards for buildings in the majority of U.S. states. Under most energy codes, builders can comply by demonstrating that the projected private expenditures on energy bills for a proposed building are less than a certain threshold. Using theory and evidence, I show that energy codes would be improved if compliance was instead determined by the projected social damages. Relative to current practice, damage-based codes would likely provide stronger incentives for electricity than natural gas conservation, in most states. Implementation of damage-based codes would lead to substantial welfare gains.

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Energy Specializations: Energy Efficiency – Residential and Commercial Buildings; Renewables – Policy and Regulation; Natural Gas – Policy and Regulation; Petroleum – Policy and Regulation; Energy Efficiency – Barriers to Adoption; Energy and the Economy – Other

JEL Codes: Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, Q54: Climate; Natural Disasters and Their Management; Global Warming, Q35: Hydrocarbon Resources, Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

Keywords: Energy efficiency, Energy codes, Differentiated policy, Environmental policy, Building codes, Climate change, Carbon emissions

DOI: 10.5547/01956574.37.2.gjac

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Published in Volume 37, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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