Energy Efficiency Resource Standards: Economics and Policy

Timothy Brennan and Karen Palmer

RFF Working Paper Series from Resources for the Future

Abstract: Twenty states in the United States have adopted energy efficiency resource standards (EERS) that specify absolute or per¬centage reductions in energy use relative to business as usual. We examine how an EERS compares to policies oriented to meeting objectives, such as reducing greenhouse gas emissions, cor¬recting for consumer error in energy efficiency investment, or reducing peak de¬mand absent real-time prices. If reducing energy use is a policy goal, one could use energy taxes or cap-and-trade systems rather than an EERS. An EERS can be optimal under special conditions, but to achieve optimal goals following energy efficiency investments, the marginal external harm must fall with greater energy use. This could happen if inframarginal energy has greater negative externalities, particularly regarding emissions, than energy employed at the margin.

Keywords: energy efficiency resource standards; energy efficiency; electricity; conservation (search for similar items in EconPapers)
JEL-codes: D02 L94 Q48 (search for similar items in EconPapers)
Date: 2012-02-27
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Energy efficiency resource standards: Economics and policy (2013)
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