Energy efficiency resource standards: Economics and policy

Timothy Brennan and Karen Palmer

Utilities Policy, 2013, vol. 25, issue C, 58-68

Abstract: Twenty states in the United States have adopted energy efficiency resource standards (EERS) that specify absolute or percentage 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, correcting for consumer error in energy efficiency investment, or reducing peak demand 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. We conclude with a table of suggestions policy makers should consider when deciding whether and how to adopt an EERS.

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: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0957178713000179
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Energy Efficiency Resource Standards: Economics and Policy (2012)
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:eee:juipol:v:25:y:2013:i:c:p:58-68

DOI: 10.1016/j.jup.2013.02.001

Access Statistics for this article

Utilities Policy is currently edited by Beecher, Janice

More articles in Utilities Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().