[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v64y2017icp63-76.html
   My bibliography  Save this article

Setting the standard? A framework for evaluating the cost-effectiveness of building energy standards

Author

Listed:
  • Papineau, Maya
Abstract
The adoption rate and stringency of building energy standards in the U.S. have been increasing since the mid-1990s as a result of the Energy Policy Act mandate of 1992 (EPAct). Current evidence on the energy savings that accrue from commercial building energy standards is based on engineering simulations, which do not account for realized behaviour once a standard is actually adopted. This paper uses quasi-experimental variation in commercial building energy standard adoptions to estimate their effect on realized electricity consumption and cost-effectiveness. In states induced by EPAct to adopt an energy standard where all new nonresidential construction was erected under a commercial standard, electricity consumption per service worker is lower by about 12%, and total commercial electricity consumption is lower by 10%. Including early adopters and never-adopters to the analysis leads to a downward bias in the treatment effect. The realized electricity savings in the EPAct states represent three quarters of predicted simulated savings, and electricity saved in 2010 came at a cost of approximately 7.7 cents per kWh.

Suggested Citation

  • Papineau, Maya, 2017. "Setting the standard? A framework for evaluating the cost-effectiveness of building energy standards," Energy Economics, Elsevier, vol. 64(C), pages 63-76.
    • Handle: RePEc:eee:eneeco:v:64:y:2017:i:c:p:63-76
    DOI: 10.1016/j.eneco.2017.02.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988317300658
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2017.02.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Matthew J. Kotchen, 2015. "Do Building Energy Codes Have a Lasting Effect on Energy Consumption? New Evidence From Residential Billing Data in Florida," NBER Working Papers 21398, National Bureau of Economic Research, Inc.
    2. Levinson, Arik, 2014. "California energy efficiency: Lessons for the rest of the world, or not?," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 269-289.
    3. Pedro Linares & Xavier Labandeira, 2010. "Energy Efficiency: Economics And Policy," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 573-592, July.
    4. Joskow, Paul L., 1994. "More from the guru of energy efficiency: 'There must be a pony!'," The Electricity Journal, Elsevier, vol. 7(4), pages 50-61, May.
    5. Hunt Allcott, 2011. "Consumers' Perceptions and Misperceptions of Energy Costs," American Economic Review, American Economic Association, vol. 101(3), pages 98-104, May.
    6. Paul W. Parfomak & Lester B. Lave, 1996. "How Many Kilowatts are in a Negawatt? Verifying Ex Post Estimates of Utility Conservation Impacts at the Regional Level," The Energy Journal, , vol. 17(4), pages 59-87, October.
    7. Gilbert E. Metcalf & Kevin A. Hassett, 1999. "Measuring The Energy Savings From Home Improvement Investments: Evidence From Monthly Billing Data," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 516-528, August.
    8. Sorrell, Steve & Dimitropoulos, John, 2008. "The rebound effect: Microeconomic definitions, limitations and extensions," Ecological Economics, Elsevier, vol. 65(3), pages 636-649, April.
    9. Marcy Burchfield & Henry G. Overman & Diego Puga & Matthew A. Turner, 2006. "Causes of Sprawl: A Portrait from Space," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 587-633.
    10. Kenneth Gillingham & Matthew J. Kotchen & David S. Rapson & Gernot Wagner, 2013. "The rebound effect is overplayed," Nature, Nature, vol. 493(7433), pages 475-476, January.
    11. Gans, Will & Alberini, Anna & Longo, Alberto, 2013. "Smart meter devices and the effect of feedback on residential electricity consumption: Evidence from a natural experiment in Northern Ireland," Energy Economics, Elsevier, vol. 36(C), pages 729-743.
    12. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    13. David S. Loughran and Jonathan Kulick, 2004. "Demand-Side Management and Energy Efficiency in the United States," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 19-44.
    14. Soren T. Anderson & Ian W. H. Parry & James M. Sallee & Carolyn Fischer, 2011. "Automobile Fuel Economy Standards: Impacts, Efficiency, and Alternatives," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 89-108, Winter.
    15. Paul L. Joskow & Donald B. Marron, 1992. "What Does a Negawatt Really Cost? Evidence from Utility Conservation Programs," The Energy Journal, , vol. 13(4), pages 41-74, October.
    16. Glaeser, Edward L. & Kahn, Matthew E., 2004. "Sprawl and urban growth," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 56, pages 2481-2527, Elsevier.
    17. Katrina Jessoe & David Rapson, 2014. "Knowledge Is (Less) Power: Experimental Evidence from Residential Energy Use," American Economic Review, American Economic Association, vol. 104(4), pages 1417-1438, April.
    18. Karen A. Danielsen & Robert E. Lang & William Fulton, 1999. "Retracting suburbia: Smart growth and the future of housing," Housing Policy Debate, Taylor & Francis Journals, vol. 10(3), pages 513-540, January.
    19. Small, Kenneth A., 2012. "Energy policies for passenger motor vehicles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 874-889.
    20. Alberini, Anna & Bigano, Andrea, 2015. "How effective are energy-efficiency incentive programs? Evidence from Italian homeowners," Energy Economics, Elsevier, vol. 52(S1), pages 76-85.
    21. Toshi H. Arimura, Shanjun Li, Richard G. Newell, and Karen Palmer, 2012. "Cost-Effectiveness of Electricity Energy Efficiency Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    22. Parry, Ian W.H. & Evans, David & Oates, Wallace E., 2014. "Are energy efficiency standards justified?," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 104-125.
    23. Grant D. Jacobsen & Matthew J. Kotchen, 2013. "Are Building Codes Effective at Saving Energy? Evidence from Residential Billing Data in Florida," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 34-49, March.
    24. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    25. Anin Aroonruengsawat, Maximilian Auffhammer, and Alan H. Sanstad, 2012. "The Impact of State Level Building Codes on Residential Electricity Consumption," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    26. Dennis J. Aigner & Joseph G. Hirschberg, 1985. "Commercial/Industrial Customer Response to Time-Of-Use Electricity Prices: Some Experimental Results," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 341-355, Autumn.
    27. Anderson, Soren T. & Newell, Richard G., 2004. "Information programs for technology adoption: the case of energy-efficiency audits," Resource and Energy Economics, Elsevier, vol. 26(1), pages 27-50, March.
    28. Marvin J. Horowitz, 2004. "Electricity Intensity in the Commercial Sector: Market and Public Program Effects," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 115-138.
    29. Tsvetanov, Tsvetan & Segerson, Kathleen, 2013. "Re-evaluating the role of energy efficiency standards: A behavioral economics approach," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 347-363.
    30. Jaffe Adam B. & Stavins Robert N., 1995. "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 43-63, November.
    31. Aigner, D J & Newman, J & Tishler, A, 1994. "The Response of Small and Medium-Size Business Customers to Time-of-Use (TOU) Electricity Rates in Israel," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(3), pages 283-304, July-Sept.
    32. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366, Elsevier.
    33. Allcott, Hunt, 2011. "Social norms and energy conservation," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1082-1095, October.
    34. Chitnis, Mona & Sorrell, Steve, 2015. "Living up to expectations: Estimating direct and indirect rebound effects for UK households," Energy Economics, Elsevier, vol. 52(S1), pages 100-116.
    35. Maximilian Auffhammer & Carl Blumstein & Meredith Fowlie, 2008. "Demand-Side Management and Energy Efficiency Revisited," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 91-104.
    36. Baltagi, Badi H. & Bresson, Georges & Pirotte, Alain, 2002. "Comparison of forecast performance for homogeneous, heterogeneous and shrinkage estimators: Some empirical evidence from US electricity and natural-gas consumption," Economics Letters, Elsevier, vol. 76(3), pages 375-382, August.
    37. Arik Levinson, 2016. "How Much Energy Do Building Energy Codes Save? Evidence from California Houses," American Economic Review, American Economic Association, vol. 106(10), pages 2867-2894, October.
    38. Hahn, Robert W & Stavins, Robert N, 1992. "Economic Incentives for Environmental Protection: Integrating Theory and Practice," American Economic Review, American Economic Association, vol. 82(2), pages 464-468, May.
    39. Allcott, Hunt, 2011. "Social norms and energy conservation," Journal of Public Economics, Elsevier, vol. 95(9), pages 1082-1095.
    40. Katrina Jessoe & David Rapson, 2015. "Commercial and Industrial Demand Response Under Mandatory Time-of-Use Electricity Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 63(3), pages 397-421, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maya Papineau, 2017. "Energy Efficiency Premiums in Unlabeled Office Buildings," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    2. Kim, Dongsu & Cho, Heejin & Koh, Jaeyoon & Im, Piljae, 2020. "Net-zero energy building design and life-cycle cost analysis with air-source variable refrigerant flow and distributed photovoltaic systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    3. Papineau, Maya & Rivers, Nicholas, 2022. "Experimental evidence on heat loss visualization and personalized information to motivate energy savings," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    4. Wang, Xia & Feng, Wei & Cai, Weiguang & Ren, Hong & Ding, Chao & Zhou, Nan, 2019. "Do residential building energy efficiency standards reduce energy consumption in China? – A data-driven method to validate the actual performance of building energy efficiency standards," Energy Policy, Elsevier, vol. 131(C), pages 82-98.
    5. Lemoine, Derek, 2020. "General equilibrium rebound from energy efficiency innovation," European Economic Review, Elsevier, vol. 125(C).
    6. Maya Papineau & Nicholas Rivers, "undated". "Visualizing Energy Efficiency: A Picture is Worth More Than 1,022 Words," Carleton Economic Papers 19-10, Carleton University, Department of Economics.
    7. Rana, Anber & Sadiq, Rehan & Alam, M. Shahria & Karunathilake, Hirushie & Hewage, Kasun, 2021. "Evaluation of financial incentives for green buildings in Canadian landscape," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    8. Clayton, Jim & Devine, Avis & Holtermans, Rogier, 2021. "Beyond building certification: The impact of environmental interventions on commercial real estate operations," Energy Economics, Elsevier, vol. 93(C).
    9. Anan Watcharapongvinij & Apichit Therdyothin, 2019. "Optimum Design of Retail and Wholesale Building for Minimum Energy Consumption and Total Cost," International Journal of Energy Economics and Policy, Econjournals, vol. 9(6), pages 511-524.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    2. Maya M. Papineau, 2015. "Setting the Standard: Commercial Electricity Consumption Responses to Energy Codes," Carleton Economic Papers 15-04, Carleton University, Department of Economics.
    3. Toshi H. Arimura, Shanjun Li, Richard G. Newell, and Karen Palmer, 2012. "Cost-Effectiveness of Electricity Energy Efficiency Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    4. Katrina Jessoe, Maya Papineau, and David Rapson, 2020. "Utilities Included: Split Incentives in Commercial Electricity Contracts," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5), pages 271-303.
    5. Ramos, A. & Gago, A. & Labandeira, X. & Linares, P., 2015. "The role of information for energy efficiency in the residential sector," Energy Economics, Elsevier, vol. 52(S1), pages 17-29.
    6. Pedro Linares & Xavier Labandeira, 2010. "Energy Efficiency: Economics And Policy," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 573-592, July.
    7. Hunt Allcott & Michael Greenstone, 2012. "Is There an Energy Efficiency Gap?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 3-28, Winter.
    8. Anna Alberini, Will Gans, and Charles Towe, 2016. "Free Riding, Upsizing, and Energy Efficiency Incentives in Maryland Homes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    9. Gerarden, Todd D. & Newell, Richard G. & Stavins, Robert N. & Stowe, Robert C., 2015. "An Assessment of the Energy-Efficiency Gap and Its Implications for Climate Change Policy," Climate Change and Sustainable Development 202116, Fondazione Eni Enrico Mattei (FEEM).
    10. Boogen, Nina & Datta, Souvik & Filippini, Massimo, 2017. "Demand-side management by electric utilities in Switzerland: Analyzing its impact on residential electricity demand," Energy Economics, Elsevier, vol. 64(C), pages 402-414.
    11. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    12. Mark Miller & Anna Alberini, 2015. "Sensitivity of price elasticity of demand to aggregation, unobserved heterogeneity, price trends, and price endogeneity: Evidence from U.S. Data," CER-ETH Economics working paper series 15/223, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    13. Miller, Mark & Alberini, Anna, 2016. "Sensitivity of price elasticity of demand to aggregation, unobserved heterogeneity, price trends, and price endogeneity: Evidence from U.S. Data," Energy Policy, Elsevier, vol. 97(C), pages 235-249.
    14. Michelsen, Claus & El-Shagi, Makram & Rosenschon, Sebastian, 2016. "The diffusion of "green'' buildings in the housing market: empirics on the long run effects of energy efficiency regulation," VfS Annual Conference 2016 (Augsburg): Demographic Change 145534, Verein für Socialpolitik / German Economic Association.
    15. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2017. "Assessing the Energy-Efficiency Gap," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1486-1525, December.
    16. Horowitz, Marvin J. & Bertoldi, Paolo, 2015. "A harmonized calculation model for transforming EU bottom-up energy efficiency indicators into empirical estimates of policy impacts," Energy Economics, Elsevier, vol. 51(C), pages 135-148.
    17. Davis, Lucas & Martinez, Sebastian & Taboada, Bibiana, 2018. "How Effective is Energy-efficient Housing?: Evidence From a Field Experiment in Mexico," IDB Publications (Working Papers) 8767, Inter-American Development Bank.
    18. Lucas W. Davis & Alan Fuchs & Paul J. Gertler, 2012. "Cash for Coolers," NBER Working Papers 18044, National Bureau of Economic Research, Inc.
    19. Kahn, Matthew E. & Walsh, Randall, 2015. "Cities and the Environment," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 405-465, Elsevier.
    20. Louis-Gaëtan Giraudet & S. Houde, 2013. "Double moral hazard and the energy efficiency gap," Post-Print hal-00799725, HAL.

    More about this item

    Keywords

    Energy efficiency; Energy consumption; Regulation;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:64:y:2017:i:c:p:63-76. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.