Minimum Energy Efficiency Standards and Appliances: Old and New Economic Rationales

TitleMinimum Energy Efficiency Standards and Appliances: Old and New Economic Rationales
Publication TypeJournal Article
Year of Publication2016
AuthorsHoude, Sebastien, and Anna C. Spurlock
JournalEconomics of Energy & Environmental Policy
Volume5
Issue2
Date Published09/2016
KeywordsEES-EG
Abstract

We revisit Hausman and Joskow (1982)'s economic rationales for appliance minimum energy efficiency standards. In addition to the four market failures they argued could justify appliance standards--energy prices below marginal social cost, consumers underestimating energy prices, consumer discount rates above social discount rates, or principal agent problems--we discuss two additional market failures that are relevant and potentially economically important in this context: market power and innovation market failures. We highlight puzzles uncovered by recent empirical results, and suggest directions future research should take to better understand the normative implications of appliance standards.

DOI10.5547/2160-5890.5.2.shou
LBNL Report Number

LBNL-1006327