Visualizing Energy Efficiency: A Picture is Worth More Than 1,022 Words

We deploy a randomized controlled trial involving approximately 12,500 householdsshowing that providing consumers with a visual depiction of heat loss on utility bills leads toconsiderably larger energy savings compared to a popular social comparison “nudge”. Imagesshowing roof heat loss were provided to approximately 4,000 randomly selected householdsin on-bill messaging. Heat loss is visualized using infrared images taken from an aircraft-mounted infrared sensor during the winter heating season. A similarly-sized randomlyselected group received bill messaging with a ‘traditional’ social norm comparing theirconsumption to similar homes. We also find that the heat loss treatment results in a higherrate of realized energy efficiency durables investment and leads households to conserve in amanner consistent with private and social efficiency: the most inefficient households exhibitmuch larger energy reductions relative to the traditional social comparison

Energy Codes and the Landlord-Tenant Problem

I estimate the energy efficiency premium in unlabeled office buildings by exploiting variation in mandatory building energy standard implementations, as a result of the U.S. 1992 Energy Policy Act. A more stringent energy code leads to rent and price premiums of approximately 4% and 9%, respectively. Significant heterogeneity in the rent premium is observed based on who pays the utility bills, as would be expected absent asymmetric information about energy conservation characteristics among real estate market participants. The rent and price premiums are larger in hotter, more humid climates, and are consistent with full capitalization of the energy savings from a more stringent standard

Pre-Labeling Market Valuations in the U.S. Green Building Stock and the Causal Effect of Green Labels

While green-labeled buildings have been found to sell at a premium compared to nearby controls with similar observable characteristics, the voluntary nature of the labeling decision implies green-labeled buildings may have different unmeasured characteristics that may account for at least a portion of the premium. Therefore, it is unclear whether green-labeled building premiums are a causal effect of the labels. I use data on repeat sales transactions and detailed hedonic characteristics to test whether green-labeled office buildings were selling at a premium before they were labeled, and combine these results with post-labeling price premium estimates to identify realized cost-benefit ratios for green-labeling policies. The data suggest the causal net benefits of green labels range from $11.50-$19.95 per square foot. The estimated net benefits are smaller than previous estimates that have focused solely on the benefits and ignored the potential biases from nonrandom selection

Setting the Standard: Commercial Electricity Consumption Responses to Energy Codes

The adoption rate of building energy standards in the US has been increasing since the mid- 1990s as a result of the Energy Policy Act of 1992 (EPAct). However, most of the evidence on the energy savings that accrue from commercial building energy standards is based on engineering simulations, which do not account for realized behavior once a standard is actually adopted. This paper uses plausibly exogenous variation in commercial building energy standard adoptions, combined with a unique state-level dataset on electricity consumption, energy prices, and the prevalence of “plus-utilities” tenancy contracts in commercial buildings, to estimate the realized electricity consumption response to commercial energy codes. The results suggest that in states with a large fraction of post-EPAct new construction under a code, per capita commercial electricity consumption is lower by about 13%. In addition, a one percentage point increase in the rate of tenancy contracts where tenants pay directly for energy utilities is associated with a 1% decrease in per capita electricity demand. The realized energy savings are less than half of predicted simulated savings

Utilities Included: Split Incentives in Commercial Electricity Contracts

The largest decile of commercial electricity customers comprises half of commercial sector electricity usage. We quantify a substantial split incentives problem that exists when these large firms are on electricity-included property lease contracts. Using exogenous variation in weather shocks, we show that customers on tenant-paid contracts use 6-14% less electricity in summer months. The policy implications are promising. Nationwide energy savings from aligning incentives for the largest 10% of commercial customers exceeds analogous savings from the entire residential electricity sector. It is also cost-effective: switching to tenant-paid contracts via sub-metering has a private payoff period of under one year

How do Carbon Emissions Respond to Business-Cycle Shocks?

Carbon dioxide emissions are highly correlated with cyclical fluctuations in the U.S. economy; they increase during booms and fall during busts. We examine this relationship focusing on the sources of busines

An economic perspective on experience curves and dynamic economies in renewable energy technologies

This paper analyzes dynamic economies in renewable energy technologies. The paper has two contributions. The first is to test the robustness of experience in solar photovoltaic, solar thermal and wind energy to the addition of an explicit time trend, which has been done in experience studies for other industries, but not for renewable energy technologies. Estimation is carried out on the assumption that cumulative capacity, industry production, average firm production, and electricity generation affect experience and thus the fall in price. The second contribution is to test the impact of R&D on price reduction. In general cumulative experience is found to be highly statistically significant when estimated alone, and highly statistically insignificant when time is added to the model. The effect of R&D is small and statistically significant in solar photovoltaic technology and statistically insignificant in solar thermal and wind technologies

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

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.

Distributional determinants of household air pollution in China

Solid fuel burning in households is a leading health risk for people in developing countries. Several studies of indoor air pollution from solid fuels have analyzed the problem at the village and household level, but to design effective policies it is important to understand the large-scale socioeconomic drivers of household air pollution (HAP). Using county-level data covering all of China, we examine relationships between socioeconomic variables and ambient concentrations of PM and SO2 resulting from household energy use. Applying both non-parametric and parametric techniques, we find that income and education are robust determinants of HAP; structural characteristics affect the HAP turning points; and the poorest counties bear a disproportionate amount of total pollution, especially urban counties and counties located in the coastal provinces

Carbon emissions and business cycles

Carbon emissions and real GDP are strongly correlated over the U.S. business cycle. This relationship suggests that macroeconomic shocks inducing cyclical fluctuations in output should also account for the cyclical behavior of emissions and motivates our analysis. We begin by expanding the set of technology shocks in a popular emissions-augmented dynamic stochastic general equilibrium model from the literature, and show that the model generates positive emissions-GDP comovements to each shock through distinct channels. We then estimate the emissions’ response to empirically identified technology shocks using structural vector autoregressions (SVARs). Using the SVARs, we also rank the shocks in terms of explaining the emissions’ forecast error variation. While emissions tend to rise gradually after most shocks, consistent with their theoretical counterparts, the impulse responses are not statistically significant. Unanticipated technology shocks account for less than 10 percent of the variation in emissions. By contrast, anticipated investment technology shocks account for 25 percent of the variation. Government spending and monetary policy shocks account for less than 1 percent. Importan