The adverse effect of energy-efficiency policy

Konferenzbeitrag

I analyze energy-efficiency policy as a prescription of a minimum-efficiency standard for energy-using household goods like cars, building insulation, and home appliances. Such a policy has two effects. At the intensive margin, a household that invests will choose a more efficient device. At the extensive margin, there will be more households that choose not to invest at all. Thus, additional to and different from rebound effects, energy-efficiency policy may have unintended consequences. I analyze the equilibrium effects of a minimum-efficiency standard, taking price adjustments and household heterogeneity into account. A moderate minimum-efficiency standard increases demand for efficiency-enhancing household capital goods, and reduces energy demand. More stringent policy is shown to be less effective or even counterproductive. For the case of a fixed supply of efficiency-enhancing capital, it is shown that minimum-efficiency standards increase equilibrium energy demand. Finally, I analyze which households benefit from minimum-efficiency standards and which ones lose. A standard induces investing households to expend more for household capital and less for energy. The wedge between the induced expenditures and the private optimum is analyzed as a deadweight loss.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2019: 30 Jahre Mauerfall - Demokratie und Marktwirtschaft - Session: Environmental Economics IV ; No. C01-V2

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Energy: Demand and Supply; Prices ; Energy: Government Policy ; Intertemporal Household Choice; Life Cycle Models and Saving
• Thema: Energy Efficiency ; Rebound Effects ; Household Heterogeneity ; Extensive Margin ; Gruenspecht Effect ; Investment ; Theory of Environmental Policy

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Voß, Achim
• Ereignis: Veröffentlichung
• (wer): ZBW - Leibniz-Informationszentrum Wirtschaft
• (wo): Kiel, Hamburg
• (wann): 2019

Weitere Informationen

• Handle: http://hdl.handle.net/10419/203495
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ