Energy conservation proponents have recently attempted to provide a more rigorous economics justification for both energy appliance standards and utility energy conservation programmes. A tenable case cannot however, be made: market failures do not produce a consistent bias towards energy use; conservation programmes do not reduce the cause of the market failure, and more typically exacerbate market or regulatory failures; and there is no evidence that such programmes make consumers better off in the relevant sense that consumers are willing to pay for them. The development of competitive electricity and gas commodity markets at the end-use level will produce an efficient disposition of utility sponsored programmes.
Energy Policy – Elsevier
Published: Apr 1, 1996
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