American Economic Review Vol. 105 No. 5 2015

Deconstructing the Energy-Efficiency Gap: Conceptual Frameworks and Evidence

Todd Gerarden¹; Richard G. Newell²; Robert N. Stavins¹

¹ Harvard Kennedy School, 79 John F. Kennedy St., Cambridge, MA 02138 (e-mail: ) · ² Nicholas School of the Environment, Duke University, 140 Science Dr., 101 Gross Hall, Durham, NC 27708 (e-mail: )

Abstract

Energy-efficient technologies offer considerable promise for reducing the financial costs and environmental damages associated with energy use, but these technologies appear not to be adopted to the degree that appears justified, even on a purely private basis. We present two complementary frameworks for understanding this so-called “energy paradox” or “energy efficiency gap.” First, we build upon previous literature by dividing potential explanations for the energy efficiency gap into three categories: market failures, behavioral anomalies, and model and measurement errors. Second, we examine the elements of cost-minimizing energy efficiency decisions, the typical benchmark used in assessing the gap's magnitude.

DOI

10.1257/aer.p20151012

Volume

105

Issue

5

Pages

183-186

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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