A Pareto superior incentive scheme for residential electricity conservation

C. K. Woo, K. H. Cao, Y. S. Cheng and H. Qi ()
Additional contact information
H. Qi: Audencia Business School

Post-Print from HAL

Abstract: Responding to the imminent threat of climate change, the United Nations urges its members to achieve net zero by 2050. China leads the world in energy consumption and CO2 emissions and has committed to carbon neutrality before 2060. As a special administrative region of China, Hong Kong aims to cut 50% of its 2005 level of CO2 emissions by 2035. Decarbonizing Hong Kong's electricity sector entails conservation, energy efficiency improvement, displacing coal-fired generation with natural-gas-fired and renewable generation and increasing import of carbon-free energy from Mainland China. Illustrated through Hong Kong's inclining block rates, this paper proposes an incentive scheme with voluntary participation ("Scheme" for short) to promote residential electricity conservation. The Scheme is Pareto superior because its implementation benefits participating customers without harming the local utilities and non-participating customers. Despite its Hong Kong residential focus, the Scheme's design principle informs all electric utilities worldwide on how to develop Pareto superior per kWh incentives for electricity conservation, notwithstanding that these utilities may have highly nonlinear residential and non-residential tariffs. Hence, the Scheme merits consideration for pilot testing to determine its customer acceptance and conservation effectiveness.

Keywords: Pareto superior incentive; electricity conservation; inclining block rates; net zero; carbon pricing; Hong Kong (search for similar items in EconPapers)
Date: 2025-07
Note: View the original document on HAL open archive server: https://hal.science/hal-04994895v2
References: Add references at CitEc
Citations:

Published in Energy Policy, 2025, 202 (July 2025), ⟨10.1016/j.enpol.2025.114588⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-04994895

DOI: 10.1016/j.enpol.2025.114588

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().