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Social Benefits of Financial Investment Support in Energy Conservation Policy

Torleif Haugland

Year: 1996
Volume: Volume17
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No2-5
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Abstract:
This paper examines the costs and benefits of a Norwegian energy conservation program that provided financial support for investments in energy efficiency. Participants in the program included industry, commerce, public services and households. Evaluation of the program shows that about 70% of the participants were "free riders' who would have invested in efficiency improvements even in the absence of the program. The economic efficiency was further reduced by economic distortions caused by taxes needed to finance the program. However, the energy savings did give environmental benefits through reduced atmospheric emissions, although this effect was somewhat diluted through a "conservation rebound," where the actual reduction in energy consumption was less than the theoretical savings. The energy conservation program is also highly sensitive to assumptions about the economic lifetime of the investments.



An Actions-Based Estimate of the Free Rider Fraction in Electric Utility DSM Programs

Eric Malm

Year: 1996
Volume: Volume17
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No3-3
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Abstract:
Most estimates of the free rider fraction are based on ex-post surveys of program participants. Program participants who indicate that they would have made the supported changes without the program are labeled as "free riders." This paper provides an estimate of the free rider fraction based on consumer actions. A set of energy-use clusters acts as a base against which the likely behavior of consumers in the absence of an efficiency program can be assessed. The clusters can also be used target spending at customers who are least likely to invest in efficiency on their own. The Actions-Based estimate does not suffer from the biases implicit in the standard ex-post survey estimates.



Electric Utility Demand Side Management in Canada

Nic Rivers and Mark Jaccard

Year: 2011
Volume: Volume 32
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol32-No4-6
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Abstract:
Government, utility, and private subsidies for energy efficiency play a prominent role in current efforts to reduce greenhouse gas emissions, yet the effectiveness of this policy approach is in dispute. One opportunity for empirical analysis is provided by the past energy efficiency subsidies, called demand-side management programs, offered by electric utilities in North America over several decades. Between 1990 and 2005, most electric utilities in Canada administered such programs, with total spending of $2.9 billion (CDN$2005). This paper uses the significant inter-annual variation in demand side management spending during this period to econometrically estimate the effectiveness of these subsidies. The resulting estimates indicate that these programs have not had a substantial impact on overall electricity consumption in Canada.





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