Reaching (Beyond) the Frontier: Energy Efficiency in Europe
Serhan Cevik and
Kelly Gao
No 2023/198, IMF Working Papers from International Monetary Fund
Abstract:
The world is not decarbonizing fast enough, with global warming on track to reach as much as 4°C over the next century absent a global green transition. Policymakers in Europe—and beyond—still have an opportunity both to achieve net zero emissions by 2050 and to strengthen economic prospects by increasing energy efficiency, along with changing the energy mix from fossil fuels to renewables. In this paper, we assess energy efficiency (or intensity) in a panel of 38 European countries over the period 1980–2021 by using the stochastic frontier analysis and obtain statistically significant and intuitive results. We have two key findings. First, price signals, including through the introduction of a carbon tax and the removal of fossil fuel subsidies, are critical for energy efficiency, as consumers respond to changes in energy prices. Second, stronger environmental policies and institutions generate unambiguous improvements in energy efficiency by inducing investment in energy efficient equipment and buildings and nudging consumers for energy conservation. These results—robust to alternative specifications and methods—have important policy implications for green growth with higher energy efficiency.
Keywords: Energy consumption; energy efficiency; stochastis frontier analysis; Europe; price signal; stochastic frontier analysis; energy efficiency in Europe; total energy consumption; Energy conservation; Consumption; Environmental policy; Greenhouse gas emissions; Energy prices; Global (search for similar items in EconPapers)
Pages: 19
Date: 2023-09-22
New Economics Papers: this item is included in nep-eec, nep-eff, nep-ene, nep-env and nep-nud
References: Add references at CitEc
Citations:
Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=539375 (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2023/198
Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm
Access Statistics for this paper
More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().