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California Energy Efficiency: Lessons for the Rest of the World, or Not?

Arik Levinson ()

No gueconwpa~13-13-03, Working Papers from Georgetown University, Department of Economics

Abstract: Starting in the 1970s California's residential electricity consumption per capita stopped increasing, while other states' electricity use continued to grow steadily. Similar patterns can be seen in non-electric energy, industry, and transportation. Had other states' energy use followed California's trajectory, the U.S. would have already achieved the Obama Administration's goal of reducing U.S. greenhouse gas emissions to 17 percent below 2005 levels by 2020. What accounts for California's residential electricity savings? Some credit regulations, especially the strict energy efficiency standards for buildings and appliances enacted by California in the mid-1970s. They argue that other states and countries could replicate California's gains, and that California should build on its own success by tightening those standards further. Skeptics point to three long-run trends that differentiate California's electricity demand from other states: (1) shifting of the U.S. population towards warmer climates of the South and West; (2) relatively small income elasticity of energy demand in California's temperate climate; and (3) evolving differences between the demographics of households in California and other states. Together, these trends account for virtually all of California's apparent residential electricity savings, thus providing no lessons for other states or countries considering adopting or tightening their energy efficiency standards.

Date: 2013-01-29
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Journal Article: California energy efficiency: Lessons for the rest of the world, or not? (2014) Downloads
Working Paper: California Energy Efficiency: Lessons for the Rest of the World, or Not? (2013) Downloads
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