Who Pays for Energy Efficiency Standards?

Carolyn Fischer

Discussion Papers from Resources For the Future

Abstract: Policies to promote energy efficiency in household appliances have different impacts, depending on the structure of market supply. If provision is perfectly competitive, markets will offer the variety of energy efficiency levels that consumers demand. However, if producers can price discriminate, using energy intensity to help segment consumer demand, consumers of low-end appliances are offered too little energy efficiency so that high-end consumers can be charged more for efficient appliances. Minimum energy efficiency standards can then improve welfare. We also consider average intensity standards, energy prices, and innovation and identify important differences in their effects on energy intensity, welfare, and consumers, depending on market structures. To evaluate the role for policy, one must know not only how consumers value energy efficiency in their decisionmaking, but also how producers respond to those values.

Keywords: energy efficiency; appliance; standards; price discrimination (search for similar items in EconPapers)
JEL-codes: Q40 Q55 Q58 O3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-mic
Date: 2004-02-25
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