defining the rebound effect abstract this paper gives rigorous definitions of the rebound effect not only in the well described single commodity case khazzoom 1980 the energy journal 1 4 21 40 but also for a multiple commodity case it is shown that the familiar laws for the single case do not hold for the multiple case the paper describes the state of the art of empirical estimation of the rebound effect with special focus on the estimates done for the netherlands we conclude that according to every definition empirical evidence shows that the re is probably small between 0 and 15

turning lights into flights estimating direct and indirect rebound effects for uk households energy efficiency improvements by households lead to rebound effects that offset the potential energy and emissions savings direct rebound effects result from increased demand for cheaper energy services while indirect rebound effects result from increased demand for other goods and services that also require energy to provide research to date has focused upon the former but both are important for climate change this study estimates the combined direct and indirect rebound effects from seven measures that improve the energy efficiency of uk dwellings the methodology is based upon estimates of the income elasticity and greenhouse gas ghg intensity of 16 categories of household goods and services and allows for the embodied emissions of the energy efficiency measures themselves as well as the capital cost of the measures rebound effects are measured in ghg terms and relate to the adoption of these measures by an average uk household the study finds that the rebound effects from these measures are typically in the range 5 15 and arise mostly from indirect effects this is largely because expenditure on gas and electricity is more ghg intensive than expenditure on other goods and services however the anticipated shift towards a low carbon electricity system in the uk may lead to much larger rebound effects

economic analysis of upgrading aging residential buildings in china based on dynamic energy consumption and energy price in a market economy abstract this article employed a standard lcc to conduct economic analysis of upgrading the aging residential buildings in china according to the current situation an interest rate of 6 an inflation rate of 3 an increase rate of annual energy savings of 2 and an increase rate of electricity price of 2 were assumed in the method the results indicated that only relying on gradually increasing electricity price and governments subsidies was not enough after detailed analysis of the energy saving measures and the distribution of all benefits from building energy retrofit it was found that actually only 1 3 of original cost was spent only for energy savings the second 1 3 for both energy savings and good facade appearance and occupants should share the last 1 3 because even if without energy retrofit they would have to pay the part too the corresponding results proved that the first 1 3 of investment cost could be drawn back within the residue life cycle and so the investment could be accepted in a sheer market economy in the end a model about distribution of investment cost of and benefits was proposed to adapt the market economy to overcome the financial problems in china

marginal commodity tax reforms a survey as noted 30 years ago by martin feldstein optimal taxes may be useless for practical purposes and emphasis should instead be placed on the possibility of enhancing welfare by reforming existing tax rates in this perspective marginal commodity tax reforms are gaining increasing attention due to political and economic constraints on large reforms of direct or indirect taxation in this paper we summarize the main features and results of the literature on marginal commodity tax reforms pioneered by ahmad and stern further developed by yitzhaki and thirsk and recently reinterpreted by makdissi and wodon we establish new links to other fields of research namely the literature on the use of equivalence scales and on poverty measurement we also critically examine some issues associated with the implementation of marginal tax reforms with special reference to the calculation of welfare weights and revenue effects finally we suggest directions for future research on poverty reducing commodity tax reforms

modelling the joint determination of household labour supplies and commodity demands in addition to choosing the allocation of total expenditure between commodities households may also be able to make decisions over the allocation of their time between market work and leisure in both theoretical and empirical work it has often been the case that these decisions have been analysed separately in this paper we stress the theoretical attractions of considering the joint determination of the allocation of time between work and leisure and the allocation of total expenditure between commodities in a utility maximising framework using a sample of individual households we attempt to evaluate the empirical importance of the joint determination model over the separate determination of labour supplies and commodity demands our approach follows that of abbott and ashenfelter i976 phlips i978 barnett i979 deaton and muellbauer i980 and atkinson and stern i980 here we pay particular attention to the following four important aspects of household decision making over commodity demand and labour supply the first concerns the commonly assumed restriction on the household s preferences of weak separability between goods and leisure this assumption allows the estimation of commodity demand systems and engel curves that exclude wage rate variables in cross section household budget data with large variation in wage rates across the sample the invalidity of this assumption would involve a serious mis specification any correlation between the excluded wage variable and the included price income and demographic variables would lead to biased parameter estimates and hence biased estimated elasticities similarly this assumption allows the estimation of labour supply curves that exclude relative price variables and its invalidity could produce biased labour supply elasticities a second aspect of household decision making which we wish to highlight arises from the suspicion commonly alluded to in labour economics texts that primary male workers may not be free to choose their hours of work thus we estimate a matched pair of rationed and unrationed systems following the work of neary and roberts i 980 and deaton and muellbauer i 979 the separability restriction is not unrelated to this point since without it we will see that the rationed hours of work enter demand systems in a complex fashion in effect

optimal taxation and cross price effects on labor supply estimates of the optimal gas tax abstract this study estimates parameters necessary to calculate the optimal second best gasoline tax most notably the cross price elasticity between gasoline and leisure prior theoretical work indicates the importance of this elasticity but despite this almost none of the prior studies of commodity taxation and none of the studies on second best environmental regulation actually estimate it using household data we find that gasoline is a relative complement to leisure and thus that the optimal gasoline tax is significantly higher than marginal damages the opposite of the result suggested by the bulk of the prior literature indeed even if there were no externalities at all associated with gasoline the optimal tax rate would still be almost equal to the average gas tax rate in the u s following this approach to estimate cross price elasticities with leisure could strongly influence estimates of optimal rates for other important commodity or pollution taxes

fiscal policy and growth in a small open economy with elastic labour supply endogenizing labour supply leads to fundamental changes in the equilibrium structure of the ak growth model of a small open economy the balanced growth equilibrium is described by two tradeoff loci relating the equilibrium growth rate to the fraction of time devoted to leisure the implications of endogenous labour supply for fiscal policy are addressed the effects of distortionary taxes and government expenditure on the equilibrium growth leisure employment tradeoff are analysed the responses contrast with both those of a closed economy having an elastic labour supply and an open economy with fixed labour supply optimal fiscal policy is also characterized jel classification f41 f43 politique fiscale et croissance dans une petite economie ouverte quand l offre de travail est elastique l endogeneisation de l offre de travail entraine des changements fondamentaux dans la structure d equilibre du modele de croissance du type ak d une petite economie ouverte l equilibre de croissance balancee est decrit par deux lieux de relations d equivalence reliant le taux de croissance d equilibre a la fraction du temps allouee au loisir on examine les implications de cette endogen6isation de l offre de travail pour la politique fiscale on analyse les effets de taxes distorsionnantes et des depenses gouvemementales sur la relation d 6equivalence entre taux de croissance et loisir et donc emploi on obtient des reactions differentes de celles qu on obtient en economie ferm6e quand l offre de travail est elastique et en economie ouverte quand l offre de travail est fixe on proc ede alors a la definition de la politique fiscale optimale

co2 emissions non renewable and renewable electricity production economic growth and international trade in italy abstract this paper applies the autoregressive distributed lag ardl bounds testing approach to cointegration to investigate the dynamic causal relationships between co2 emissions per capita real gdp per capita per capita non renewable electricity production and per capita renewable electricity production and international trade in the case of italy from 1960 to 2011 we find cointegration among these variables in the presence of possible structural breaks and we overcome the problem of multicollinearity in the research design the environmental kuznets curve ekc hypothesis is validated analytically because the estimated pollution model indicates that economic growth leads to less pollution over time per capita renewable electricity production reduces the level of co2 emissions per capita in the short run and in the long run whereas international trade only impacts positively upon carbon dioxide emissions per capita in the long run international trade granger causes co2 emissions per capita and non renewable electricity production per capita moreover the results depict the existence of the long run unidirectional granger causality relation running from output per capita to renewable electricity production per capita and from non renewable electricity production per capita to renewable electricity production per capita the findings indicate that renewable electricity production is a key solution in reducing pollutant emissions over time this result should be of concern to policy makers

reducing energy demand a review of issues challenges and approaches most commentators expect improved energy efficiency and reduced energy demand to provide the dominant contribution to tackling global climate change but at the global level the correlation between increased wealth and increased energy consumption is very strong and the impact of policies to reduce energy demand is both limited and contested different academic disciplines approach energy demand reduction in different ways emphasising some mechanisms and neglecting others being more or less optimistic about the potential for reducing energy demand and providing insights that are more or less useful for policymakers this article provides an overview of the main issues and challenges associated with energy demand reduction summarises how this challenge is framed by key academic disciplines indicates how these can provide complementary insights for policymakers and argues that a sociotechnical perspective can provide a deeper understanding of the nature of this challenge and the processes through which it can be achieved the article integrates ideas from the natural sciences economics psychology innovation studies and sociology but does not give equal weight to each it argues that reducing energy demand will prove more difficult than is commonly assumed and current approaches will be insufficient to deliver the transformation required

estimating the implicit price of energy efficiency improvements in the residential housing market a hedonic approach abstract in this study a hedonic price model has been used to examine the impact which efficiency improvements have on housing values our study represents an improvement over a previous attempt to examine this issue in that the independent variable used in our analysis is designed to reflect variation in structural efficiency levels among sample homes rather than variation in occupant lifestyles and preferences in addition a flexible functional form is used to prevent bias due to misspecification of the hedonic price equation the study results reveal that efficiency improvements are capitalized into housing prices in des moines iowa at the average efficiency level of homes in the sample an efficiency improvement which results in a 1 decrease in the level of expenditures necessary to maintain the house at 65 f in the average heating season will increase the expected selling price of the house by 11 63 the premium obtained for an equivalent efficiency improvement will be greater than 11 63 in a relatively efficient home and less than 11 63 in a relatively inefficient home without further information concerning the price expectations and discount rates utilized by des moines home buyers and the average remaining life of fuels saving investments in the sample it cannot be determined whether the housing market is pricing fuel savings efficiently regardless of whether or not the implicit price of fuel savings is the outcome of an efficient market information on this implicit price facilitates the estimation of an average resale value of fuel saving investments in addition the results of this study refute the hypothesis that efficiency improving investments are not capitalized into housing prices

the causal relationship between energy consumption and economic growth in the asean 5 countries abstract the objective of this study is to examine the causal relationship between energy consumption and economic growth for asean 5 countries which includes indonesia malaysia thailand singapore and the philippines for empirical examination annual time series data in the period of 1980 2012 are used the results of johansen co integration test reveal that there exists one co integrating relationship among the variables in case of indonesia malaysia the philippines and singapore the results uncover the existence of two co integrating associations among the variables for thailand the granger causality test suggests that there is no unilateral causality for indonesia as in all the three cases in case of malaysia the economic growth caused energy consumption however no evidence is found for causality either from exports or from gross fixed capital formation to energy consumption while in the cases of thailand and the philippines the direction of causality runs from gross fixed capital formation to energy consumption for singapore energy consumption runs from two sides i e one from exports side and the other from gross fixed capital formation side the findings exhibit that energy consumption has significant and long run relationship to economic growth for almost all asean 5 countries the findings suggest that policy makers need to formulate policies conducive to the energy development which will consequently accelerate sustainable economic growth in asean countries energy development should be based on the existing condition of each country a comprehensive investment framework for renewable energy should also be developed besides maintaining adequate energy inventory the asean countries should strengthen their institutions and capacity as well as cooperation in energy management and development

an alternative way to model merit good arguments abstract besley j public econ 35 1988 371 uses a scaling approach to model merit good arguments in commodity tax policy in this paper i question this approach on the grounds that it produces wrong recommendations taxation subsidisation of merit demerit goods whenever the demand for the de merit good is inelastic i propose an alternative approach that does not suffer from this deficiency and that allows for a straightforward interpretation

review of economic growth and energy consumption a panel cointegration analysis for eu countries abstract this paper examines the long run relationship between energy consumption and real gdp including fixed capital and total employment for 18 eu countries from 1995 to 2012 the analysis was based on the panel unit root tests panel cointegration test and fully modified ordinary least squares fmols estimator and dynamic ordinary least squares dols estimator data were analyzed in three groups all sample visegrad countries v4 and old 14 eu countries indeed the results demonstrate that economic growth and the variables energy consumption gross fixed capital are cointegrated for the whole panel of countries as well as for the two selected groups of countries furthermore the panel fmols and dols estimators reveal that the relationship between energy consumption gross fixed capital and economic growth is positive

the nascent market for green real estate in beijing abstract in recent years formal certification programs for rating and evaluating the sustainability and energy efficiency of buildings have proliferated around the world developers recognize that such green labels differentiate products and allow them to charge a price premium china has not formally adopted such rating standards in the absence of such standards developers are competing with each other based on their own self reported indicators of their buildings greenness we create an index using google search to rank housing complexes in beijing with respect to their marketing greenness and document that these green units sell for a price premium at the presale stage but they subsequently resell or rent for a price discount an introduction of a standardized official certification program would help green demanders to acquire units that they desire and would accelerate the advance of china s nascent green real estate market

explaining the price of oil 1971 2014 the need to use reliable data on oil discovery and to account for mid point peak abstract this paper explains in broad terms the price of oil from 1971 to 2014 and focuses on the large price increases after 1973 and 2004 the explanation for these increases includes the quantity of conventional oil i e oil in fields discovered combined with the decline in production of this oil that occurs typically once mid point is passed many past explanations of oil price have overlooked these two constraints and hence provided insufficient explanations of oil price reliable data on conventional oil discovery cannot come from public domain proved 1p oil reserves as such data are very misleading instead oil industry backdated proved plus probable 2p data must be used it is recognised that accessing 2p data can be expensive or difficult the mid point peak of conventional oil production results from a region s field size distribution its fall off in oil discovery and the physics of field decline in terms of the future price of oil estimates of the global recoverable resource of conventional oil show that the oil price will remain high on average unless dramatic changes occur in the volume of production and cost of non conventional oils or if the overall demand for oil were to decline the paper concludes with policy recommendations

economic potential of energy efficient retrofitting in the swiss residential building sector the effects of policy instruments and energy price expectations the aim of this paper is to analyse the profitability of energy efficient retrofit investments in the swiss residential building sector from the house owner s perspective different energy price expectations policy instruments such as subsidies income tax deduction and a carbon tax as well as potential future cost degression of energy efficiency measures were taken into account the discounted cash flow method was used for the investment analysis of different retrofit packages applied to a model building scheduled for renovation i e a single family house constructed between 1948 and 1975 the results show that present swiss policy instruments push investments for energy efficient retrofitting to profitability cost degression has a minor significance for investment profitability however the most relevant factor for the investment analysis is the expected energy price expecting a future fuel oil price at the level of 2005 efficiency investments are close to profitability even without policy support if higher energy prices were expected energy efficient retrofitting would be an attractive investment opportunity

tax reform results with different demand systems abstract we calculate the marginal welfare costs for a twelve commodity classification of the belgian indirect tax system price elasticities are estimated with rotterdam aids cbs and the linear expenditure system the ranking of the marginal welfare costs is similar when we use unrestricted estimates of the first three systems after the symmetry condition of the slutsky matrix is imposed the differences become more important however they diminish with increasing inequality aversion

drivers trends and uncertainty in long term price projections for energy management in public buildings buildings are responsible for almost 40 of energy consumption and co2 emissions in the eu ec 2010 improving the energy efficiency of buildings is a vital step towards achieving the eu climate and energy objectives directive 2010 31 eu outlines measures specifically focused on the energy performance of buildings incentives are created for building operators to optimize their energy sub systems in a more robust energy efficient and cost effective manner the challenge is to choose efficient energy supply portfolios accounting for technological and market deregulation and risks decision support tools for energy management in public buildings using future scenarios of market and technological developments would be beneficial the aim of this paper is to discuss the drivers and uncertainties in the recent and future energy market trends and prices including technological progress and developments in fossil fuel markets this discussion is relevant for researchers and policymakers in general and in particular as an input for scenarios used in the development of decision support systems

quantifying the severity of fuel poverty its relationship with poor housing and reasons for non investment in energy saving measures in ireland fuel poverty has generally been calculated by quantifying the number of households spending in excess of 10 of income on home heating this definition has a number of significant practical and scientific limitations this paper employs self reported data to calculate the severity of fuel poverty in ireland to identify chronic fuel poor households from occasional sufferers it also assesses domestic energy efficiency levels ireland is a useful case study as it demonstrates the highest variations in seasonal mortality and morbidity in northern europe both of which are associated with fuel poverty ireland is also experiencing extreme difficulties meeting its environmental emissions targets in light of recent spectacular economic growth reducing fuel poverty would lower energy related emissions assisting policy makers achieve these challenging targets furthermore little empirical research has been undertaken on fuel poverty in ireland this paper identifies key social groups at risk by conducting detailed socio economic and socio demographic analyses the relationship between fuel poverty and adverse housing conditions damp condensation is also examined moreover the reasons behind householders not investing in energy saving measures are reported the results show that ireland suffers from similar levels of fuel poverty as the uk with low income households suffering the greatest the key policy implications are outlined

empirical estimates of the direct rebound effect a review beginning with william stanley jevons in 1865 a number of authors have claimed that economically justified energy efficiency improvements will increase rather than reduce energy consumption jevons paradox is extremely difficult to test empirically but could have profound implications for energy and climate policy this paper summarises and critiques the arguments and evidence that have been cited in support of jevons paradox focusing in particular on the work of len brookes and harry saunders it identifies some empirical and theoretical weaknesses in these arguments highlights the questions they raise for economic orthodoxy and points to some interesting parallels between these arguments and those used by the biophysical school of ecological economics while the evidence in favour of jevons paradox is far from conclusive it does suggest that economy wide rebound effects are larger than is conventionally assumed and that energy plays a more important role in driving productivity improvements and economic growth than is conventionally assumed 2008 elsevier ltd all rights reserved

the value of domestic building energy efficiency evidence from ireland abstract following the transposition of the eu energy performance of buildings directive into irish law all properties offered for sale or to let in ireland are obliged to have an energy efficiency rating this paper analyses the effect of energy efficiency ratings on the sale and rental prices of properties in the republic of ireland using the heckman selection technique we model the decision to advertise the energy efficiency rating of a property and the effect of energy efficiency ratings on property values our results show that energy efficiency has a positive effect on both the sales and rental prices of properties and that the effect is significantly stronger in the sales segment of the property market we also analyse the effect of energy efficiency across different market conditions and we find that the effect of the energy rating is generally stronger where market conditions are worse

labour supply commodity demand and marginal tax reform this paper examines the implications of extending the ahmad stern model of indirect tax reform to include labour supply the inclusion of labour supply alters the basic measure of marginal revenue cost mrc of indirect taxation and introduces the possibility of calculating a mrc for direct taxation the paper derives the expressions for these revised mrcs and provides estimates from irish data it then examines the sensitivity of the results to assumptions regarding functional form and in particular goods leisure sc parability in setting optimal tax rates policy makers face considerable difficulties explicit assumptions must be made regarding the underlying preferences of the consumer i e the functional form for the utility and demand functions and also about how expenditures are distributed sensitivity to underlying preferences is discussed by deaton i 98 i and is empirically examined by ray i986 and ebrahimi and heady i988 policy makers also face the problem that even when they do provide explicit forms for demand functions they face difficulties regarding the reliability of estimates and are also evaluating demand responses at a point possibly quite far away from the optimum the difficulties outlined above led to the development of the marginal tax reform literature with the seminal paper in this area by ahmad and stern i984 this approach has the considerable advantage of not requiring the choice of explicit utility functions nor of distributions of expenditure but instead merely requiring information on the actual position of the economy at a single point in time using actual consumption and distributions of expenditure it must be noted that tax reform does require information on demand responses so that results in this area can still be sensitive to the specification of consumer preferences and demand systems however tax reform results appear to be less sensitive than do tax design results to this

doing well by doing good green office buildings this paper provides the first credible evidence on the economic value of the certification of green buildings in the commercial sector value derived from impersonal market transactions rather than engineering estimates we match publicly available information on the addresses of energy star and leed rated office buildings to a commercial data source detailing the characteristics of u s office buildings and their rental rates we analyze the micro data on 694 certified green buildings and on 7489 other office buildings located within a quarter mile of the certified buildings we find systematic evidence that rents for green offices are about two percent higher than rents for comparable buildings located nearby effective rents i e rents adjusted for the occupancy levels in office buildings are about six percent higher in green buildings than in comparable office buildings nearby at prevailing capitalization rates conversion of the average non green building to an equivalent green building would add more than 5 million in market value these results are robust to the statistical models employed

the rebound effect microeconomic definitions limitations and extensions abstract the rebound effect results in part from an increased consumption of energy services following an improvement in the technical efficiency of delivering those services this increased consumption offsets the energy savings that may otherwise be achieved if the rebound effect is sufficiently large it may undermine the rationale for policy measures to encourage energy efficiency the nature and magnitude of the rebound effect is the focus of long running dispute with energy economics this paper brings together previous theoretical work to provide a rigorous definition of the rebound effect to clarify key conceptual issues and to highlight the potential consequences of various assumptions for empirical estimates of the effect the focus is on the direct rebound effect for a single energy service indirect and economy wide rebound effects are not discussed beginning with khazzoom s original definition of the rebound effect we expose the limitations of three simplifying assumptions on which this definition is based first we argue that capital costs form an important part of the total cost of providing energy services and that empirical studies that estimate rebound effects from variations in energy prices are prone to bias second we argue that energy efficiency should be treated as an endogenous variable and that empirical estimates of the rebound effect may need to apply a simultaneous equation model to capture the joint determination of key variables third we explore the implications of the opportunity costs of time in the production of energy services and highlight the consequences for energy use of improved time efficiency the influence of time costs on the rebound effect and the existence of a parallel rebound effect with respect to time each of these considerations serves to highlight the difficulties in obtaining reliable estimates of the rebound effect and the different factors that need to be controlled for we discuss the implications of these findings for econometric studies and argue that several existing studies may overestimate the magnitude of the effect

the price of energy efficiency in the spanish housing market the housing sector is a substantial consumer of energy and therefore a focus for energy savings efforts the energy performance certificate epc is the main eu policy to improve the energy performance of buildings following the implementation of the epc directive into spanish law from june 2013 all properties offered for sale or rented out in spain are required to have an epc given that this is a recently introduced regulation unlike other european housing markets the spanish one lacks market data on energy efficiency ee labels and their impact on housing price in order to overcome this gap we determine the ee ratings of a sample of 1 507 homes across spain on the basis of information collected previously through household surveys this information allowed us to answer the question of whether or not and to what extent spanish housing markets capitalise the value of ee we apply the hedonic price technique and observe that more energy efficient dwellings meaning higher ee rating have a price premium between 5 4 and 9 8 compared to those with the same characteristics but lower ee level

marginal costs and co benefits of energy efficiency investments the case of the swiss residential sector abstract key elements of present investment decision making regarding energy efficiency of new buildings and the refurbishment of existing buildings are the marginal costs of energy efficiency measures and incomplete knowledge of investors and architects about pricing co benefits and new technologies this paper reports on a recently completed empirical study for the swiss residential sector it empirically quantifies the marginal costs of energy efficiency investments i e additional insulation improved window systems ventilation and heating systems and architectural concepts for the private sector first results on the economic valuation of co benefits such as improved comfort of living improved indoor air quality better protection against external noise etc may amount to the same order of magnitude as the energy related benefits are given the cost benefit analysis includes newly developed technologies that show large variations in prices due to pioneer market pricing add on of learning costs and risk components of the installers based on new empirical data on the present cost situation and past techno economic progress the potential of future cost reduction was estimated applying the experience curve concept the paper shows for the first time co benefits and cost dynamics of energy efficiency investments of which decision makers in the real estate sector politics and administrations are scarcely aware

building energy efficiency a research branch made of paradoxes abstract the literature dealing with building energy efficiency has long since debated about the possible occurrence of the so called jevons paradox in a nutshell benefiting from energy savings due to transition to high performance buildings may the same savings cause a kind of rebound effect by acting as an incentive to increase consumptions on closer inspection this is not the only paradox affecting the research branch that focuses on the energy used by the buildings and the building industry a second paradox is that investments in energy efficient solutions may contribute to energy price control which in turn lends itself to make the same investments not profitable a third paradox lies in the need to adopt energy intensive materials in order to achieve substantial energy savings in operation hence sometimes we just substitute a certain amount of operating energy with a more or less commensurate amount of embodied energy here we argue that the joint consideration of the paradoxes mentioned above should not be neglected since it brings with itself several implications needing to be disentangled whether we aim to get further enhancements in this disciplinary field

energy performance ratings and house prices in wales an empirical study this paper investigates the effect of energy performance certificate epc ratings on residential prices in wales drawing on a sample of approximately 192 000 transactions the capitalisation of energy efficiency ratings into house prices is investigated using two approaches the first adopts a cross sectional framework to investigate the effect of epc rating on price the second approach applies a repeat sales methodology to investigate the impact of epc rating on house price appreciation statistically significant positive price premiums are estimated for dwellings in epc bands a b 12 8 and c 3 5 compared to houses in band d for dwellings in band e 3 6 and f 6 5 there are statistically significant discounts such effects may not be the result of energy performance alone in addition to energy cost differences the price effect may be due to additional benefits of energy efficient features an analysis of the private rental segment reveals that in contrast to the general market low epc rated dwellings were not traded at a significant discount this suggests different implicit prices of potential energy savings for landlords and owner occupiers

housing market capitalization of thermal integrity abstract the extent to which housing markets capitalize investments in energy efficiency is important to observe the uncertainty now associated with this process can lead households to allocate resources inefficiently in the production of thermal comfort by substituting more fuel inputs for less capital from a policy perspective the end result of this is the continued construction of units in the housing stock with sub optimal levels of energy efficiency this study is a cross sectional analysis of houses constructed through the energy efficient housing demonstration program of the minnesota housing finance agency values of investments in energy efficiency are derived from a hedonic regression which includes a vector of thermal integrity factors as an independent variable

the theory of reform and indian indirect taxes abstract given a set of value judgements an initial state and a model of the economy one can ask whether some feasible tax change would increase welfare we do this by defining the marginal cost in terms of welfare of raising an extra rupee from the i th good the inverse optimum problem is the calculation of non negative welfare weights on households which imply that the initial state is optimum if no such welfare weights exist then a pareto improvement is possible we illustrate the concepts and results using data from the indian economy for 1979 1980 directions of tax reform for a number of specific social welfare functions and for pareto improvements are presented

estimating the net implicit price of energy efficient building codes on u s households abstract requiring energy efficiency building codes raises housing prices or the monthly rental equivalent but theoretically this effect might be fully offset by reductions in household energy expenditures whether there is a full compensating differential or how much households are paying implicitly is an empirical question this study estimates the net implicit price of energy efficient buildings codes iecc 2003 through iecc 2006 for american households using sample data from the american community survey 2007 a heteroskedastic seemingly unrelated estimation approach is used to estimate hedonic price house rent and energy expenditure models the value of energy efficiency building codes is capitalized into housing rents which are estimated to increase by 23 25 percent with the codes however the codes provide households a compensating differential of about a 6 47 percent reduction about 7 71 in monthly energy expenditure results indicate that the mean household net implicit price for these codes is about 140 87 per month in 2006 dollars 163 19 in 2013 dollars however this estimated price is shown to vary significantly by region energy type and the rent gradient

the choice of discount rates for public projects comment in a recent article in this review robert mendelsohn attempted to clarify david bradford s misunderstanding regarding optimal fraction of capital sk that is consumed and fraction of income that is reinvested sy one of the criteria suggested for selecting a public projects is the present value of the future consumption income from the investment as stated by mendelsohn the present value of dollar of investment is worth even more if future returns from that investment are reinvested p 240 the social present value of dollar of private investment v varies considerably with the parameters the market rate of interest r the social rate of time preference i and the rate of reinvestment sy however the impact of s on the present value v and its role in the selection process is not clear the variable sy is rather ambiguous and the optimum value in general for s is either zero or one the formula mentioned at the bottom of mendelsohn s table 1 p 240 should read

polices for increasing energy efficiency thirty years of experience in oecd countries energy efficiency improvement was an important phenomenon in the global energy balance over the past 30 years without energy efficiency improvements the oecd nations would have used approximately 49 more energy than was actually consumed as of 1998 this paper first reviews energy intensity trends for the major oecd nations since 1973 considering how much of the overall reduction in e gdp was due to energy efficiency improvement and how much was due to structural change the bulk of the paper examines the energy efficiency policies and programs adopted in japan united states and western europe commenting on their effectiveness and energy savings impacts where possible the paper also reviews the energy efficiency policies and programs adopted in california this experience shows that well designed policies can result in substantial energy savings as demonstrated in the united states where nine specific policies and programs reduced primary energy use in 2002 by approximately 11 substantial energy savings also occurred in japan some european countries and in the electricity sector in california

sensitivity of optimal commodity tax rates to alternative demand functional forms an econometric case study of india this study investigates on a nine commodity disaggregation of indian budget data nss 28th round the sensitivity of optimal commodity tax rates to alternative demand systems les and rnlps optimality is used here in the very special sense of being conditional on observed expenditure and fixed consumer prices the alternative sets of tax rates agree at low levels of inequality aversion but disagree widely at rawlsian levels les is heavily rejected in favour of its one parameter generalisation rnlps the results suggest that les price elasticities should not be used in optimal tax calculations the optimal tax rates imply only a modest redistribution

the effects of male and female labor supply on commodity demands we examine the effects of male and female labor supply on household demands and present a simple and robust test for the separability of commodity demands from labor supply using data on individual households from six years of the uk fes we estimate a demand system for seven goods which includes hours and participation dummies as conditioning variables allowance is made for the possible endogeneity of these conditioning labor supply variables we find that separability is rejected furthermore we present evidence that ignoring the effects of labor supply leads to bias in the parameter estimates

achieving affordable housing through energy efficiency strategy abstract cooperation between public and private sector has achieved a remarkable widespread in the italian context over the last two decades nevertheless the increasing difficulty in accessing the capital market and the rising cost of funding sources both noticeable over the past few years led to a slowdown of public private partnership ppp initiatives meanwhile the community is expressing new needs to be satisfied such as the conversion of brownfields the recovery of housing stock dating back to former times as well as the refurbishment of public offices or schools emerging priorities include the supply of affordable dwellings for low to medium income households this essay aims to examine a case study in which ppp and buildings energy efficiency have been successfully combined in order to jointly contribute to the achievement of a social housing settlement thanks to energy efficiency measures concerning building envelope insulation heating system and other installations the agreed rent results far higher than social rent of protected tenancies and furthermore above the range of fair rents characterising other regulated tenancies but mildly lower than market rents all this allows to achieve an equity yield rate satisfying from the perspective of a venture philanthropy investment

optimal taxes and the structure of preferences if optimal tax theory is to be the basis for calculating tax rates a close understanding is required of the relationship between the structure of preferences and the configuration of optimal tax rates otherwise hypotheses chosen by the econometrician for practical convenience may completely determine the results independently of measurement this paper explores the relationship between various types of separability particularly weak and implicit separability and optimal tax rates in the various models discussed in the literature the use of distance functions and the antonelli matrix provides a significant unification of previously disparate results in the final analysis optimal tax theory should be the basis for actual calculation of tax rates although recently there have been great advances in theoretical results and in our understanding of their meaning we are still some way from a working knowledge of whether uniform commodity taxes are in practice optimal or if not which commodities should be discriminated against present theoretical formulae do not yield clear cut results except in special cases and it has recently become clear that optimal rates depend crucially on the detailed structure of consumer preferences for example atkinson and stiglitz 3 show that with an optimal nonlinear income tax discriminatory commodity taxes are only necessary to the extent that individual commodities are not weakly separable from leisure more recently deaton 6 has shown that a similar result holds for what is perhaps the most interesting of the standard models that where there are many consumers and only a linear income tax and proportional commodity taxes are allowed in this case separability between goods and leisure together with linear engel curves for goods removes the need for differential commodity taxation in consequence nothing can be learned about commodity taxes from consumer demand studies in which commodity demands are explained conditionally on total expenditure and commodity prices and which assume linear engel curves all such studies require separability from leisure as a maintained hypothesis and so are consistent with uniform commodity taxation these results suggest that the prospects for meaningful empirical calculations of tax rates are bleak econometricians estimating commodity demand and labor supply equations make generous use of separability assumptions to enable estimation at all in consequence it is likely that empirically calculated tax rates based on econometric estimates of parameters will be determined in structure not by the measurements actually made but by arbitrary untested and even unconscious hypotheses chosen by the econometrician for practical convenience to remedy this situation and as a prelude to fruitful empirical work it is necessary to have a more explicit understanding of how preference structure affects optimal tax rates such is the object of this paper three different

the economics of green building we analyze the economics of green building finding that recent increases in the supply of green buildings and the volatility in prop erty markets have not affected the returns to green buildings we then analyze a large cross section of office buildings demonstrating that eco nomic returns to energy efficient buildings are substantial finally we relate the economic premiums for green buildings to their relative effi ciency in energy use the attributes rated for thermal efficiency as well as sustainability contribute to premiums in rents and asset values among green buildings increased energy efficiency is fully capitalized into rents and asset values

who rebounds most estimating direct and indirect rebound effects for different uk socioeconomic groups this study estimates the combined direct and indirect rebound effects from various types of energy efficiency improvement and behavioural change by uk households and explores how these effects vary with total expenditure the methodology is based upon estimates of the expenditure elasticity and ghg intensity of 16 categories of goods and services and allows for the capital cost and embodied emissions of the energy efficiency measures themselves the study finds that rebound effects in ghg terms are modest 0 32 for measures affecting domestic energy use larger 25 65 for measures affecting vehicle fuel use and very large 66 106 for measures that reduce food waste furthermore measures undertaken by low income households are associated with the largest rebound effects with direct emissions forming a larger proportion of the total rebound effect for those households measures that are subsidised or affect highly taxed energy commodities may be less effective in reducing aggregate emissions these findings highlight the importance of allowing for rebound effects within policy appraisals as well as reinforcing the case for economy wide carbon pricing

reformulating the foundations of consumer choice theory and environmental valuation abstract the burgeoning field of environmental valuation has raised serious doubts about the fundamental axioms of consumer choice theory the general validity of the walrasian system and methodological individualism this paper examines these aspects of consumer choice theory paying particular attention to the pioneering contributions of georgescu roegen we argue that evidence from psychology game theory anthropology and contingent valuation surveys reveals a more complex pattern of decision making than that described by neoclassical utility theory we discuss the notions of the invariance of preferences non satiation the principle of complementarity lexicographic preferences and the hierarchy of wants with reference to environmental valuation we also discuss the notion of marginal utility of money the validity of the walrasian system and methodological individualism using scaling concept in hierarchy theory we then address the conflict between theory and reality by introducing a probabilistic binary choice scheme under uncertainty about environmental attributes we argue that these extensions are necessary to account for consumer choices revealed in environmental valuation surveys we conclude with the hope that a reformulation of consumer choice theory based on realistic models of human behavior can be the basis for a viable alternative to neoclassical welfare economics

supply demand and the value of green buildings attention to sustainability and energy efficiency rating schemes in the commercial property sector has increased rapidly during the past decade in the uk commercial properties have been certified under the breeam rating scheme since 1999 offering fertile ground to investigate the economic dynamics of green certification in the commercial property market this paper documents that over the 2000 09 period the expanding supply of green buildings within a given london neighbourhood had a positive impact on average rents and prices but reduced rents and prices for environmentally certified real estate the results suggest that there is a gentrification effect from green buildings however each additional green building decreases the marginal effect of certification in the rental and transaction markets by 2 per cent and 5 per cent respectively in addition controlling for lease contract features like contract length and the rent free period modifies the impact of environmental certification on

the impact of energy labels and accessibility on office rents abstract energy consumption in the commercial property sector offers an important opportunity for conserving resources in this study we evaluate the financial implications of two elements of sustainability energy efficiency and accessibility in the market for commercial real estate an empirical analysis of some 1100 leasing transactions in the netherlands over the 2005 2010 period shows that buildings designated as inefficient with an eu energy performance certificate d or worse command rental levels that are some 6 5 percent lower as compared to energy efficient but otherwise similar buildings labeled a b or c furthermore this study shows that office buildings in multi functional areas with access to public transport and facilities achieve rental premiums over mono functional office districts for policymakers the results documented in this paper provide an indication on the effectiveness of the eu energy performance certificate as a market signal in the commercial property sector the findings documented here are also relevant for investors in european office markets as the importance of energy efficiency and locational diversification is bound to increase following stricter environmental regulation and changing tenant preferences

functional forms for labor supply and commodity demands with and without quantity restrictions one of the most important current questions in economic analysis is whether or not labor markets clear in the short run to answer this it is necessary to be able to distinguish between restricted and unrestricted behavior by consumers supplying labor this paper investigates the forms of preferences which lie behind linear models of labor supply and derives the functional forms for commodity demands which accompany them both with and without quantity restrictions in the labor market simple linkages between restricted and unrestricted demands are also considered as is the question of perfect aggregation over consumers in the presence of quantity restrictions

agricultural policies in the presence of distorting taxes this article analyzes how distortionary factor taxes affect the welfare impacts of production subsidies production quotas acreage controls subsidies for acreage reductions and cash transfers to farmers pre existing taxes substantially raise the costs of all these policies these additional costs reflect the welfare losses from financing certain policies by distortionary taxes they also reflect interactions with factor markets caused by changes in the costs of producing agricultural output previous studies ignore the latter types of effect consequently they significantly overstate the costs of production subsidies and understate the costs of production quotas acreage controls and subsidies for acreage reductions

does energy efficiency matter to home buyers an investigation of epc ratings and transaction prices in england abstract this paper investigates whether energy performance ratings as measured by mandatory energy performance certificates epcs are reflected in the sale prices of residential properties this is the first large scale empirical study of this topic in england involving 333 095 dwellings sold at least twice in the period from 1995 to 2012 applying hedonic regression and an augmented repeat sales regression we find a positive relationship between the energy efficiency rating of a dwelling and the transaction price per square metre the price effects of superior energy performance tend to be higher for terraced dwellings and flats compared to detached and semi detached dwellings the evidence is less clear cut for rates of house price growth but remains supportive of a positive association overall the results of this study suggest that energy efficiency labels have a measurable and significant impact on house prices in england

the greenhouse effect the fallacies in the energy efficiency solution abstract the view that widespread improvements in energy efficiency can by themselves do anything to halt the build up of greenhouse gases around the globe is fundamentally unsound it is based on the same fallacies that underlie the claim that energy savings from improving efficiency can substitute for new energy supply the paper by keepin and kats1 claiming that per tonne of coal not burned improvements in energy efficiency are more cost effective than substituting nuclear for coal fired power is therefore an irrelevancy as far as this debate is concerned reductions is energy intensity of output that are not damaging to the economy are associated with increases not decreases in energy demand at the macroeconomic level even within the boundaries of their own flawed approach their attempt2 to refute the critique of their thesis made by jones3 was little more than misdirected grape shot with no discernable connected thread of argument

economic viability in thermal retrofit policies learning from ten years of experience in germany abstract germany aims to reduce co2 emissions by 80 by 2050 compared to 1990 levels and has merged this target with mandatory energy saving regulations for thermal renovation of existing homes the policy uses the criterion of economic viability whereby renovations must pay back through the space and water heating fuel savings they produce this paper explores the extent to which economically viable thermal renovations can contribute to the 80 goal based on an analysis of germany s experience it finds that the theoretical savings being achieved based on calculated pre and post renovation consumption are around 33 while actual savings based on measured consumption are likely to be around 25 the difference appears to be due to the effects of household behaviour further average measured consumption is estimated to be around 150 180 kwh m2a nationally and this would have to be reduced to 30 35 kwh m2a to meet the 80 policy goal this is beyond the limits of economically viable renovation technology which currently achieves around 100 kwh m2a the paper suggests that policymakers should de couple the criterion of economic viability from the 80 goal emphasise other reasons for renovating to economically viable levels and consider a more systematic approach to facilitate household behaviour change

estimating broad brush rebound effects for household energy consumption in the eu 28 countries and norway some policy implications of odyssee data abstract currently there is a strong policy commitment in european union eu and organisation for economic co operation and development oecd countries to increase the energy efficiency of residential buildings and it is widely assumed that this will naturally and automatically reduce domestic energy consumption however other factors such as fuel prices wages attitudes and lifestyles also influence energy consumption this paper calculates broad brush rebound effects based on changes in energy efficiency and energy consumption in each of the 28 eu countries plus norway for the years 2000 2011 in doing so it tests how well the assumption of energy efficiency leading to energy reduction stands up to scrutiny in these lands it uses the eu s odyssee database for efficiency and consumption figures and a commonly employed econometric definition of the rebound effect as an energy efficiency elasticity most older eu lands show rebound effects in the expected range of 0 50 however the range for newer eu countries is 100 550 suggesting that energy efficiency increases are not a good predictor of energy consumption a more in depth look at one country germany suggests these results underestimate the rebound effect significantly this also identifies research needs for specific energy consumption determinants in each country to find more precisely what is driving consumption levels

energy efficiency fallacies revisited abstract a number of governments including that of the uk subscribe to the belief that a national program devoted to raising energy efficiency throughout the economy provides a costless indeed profitable route to meeting international environmental obligations this is a seductive policy it constitutes the proverbial free lunch not only avoiding politically unpopular measures like outlawing taxing or rationing offending fuels or expanding non carboniferous sources of energy like nuclear power but doing so with economic benefit the author of this contribution came to doubt the validity of this solution when it was offered as a way of mitigating the effect of the opec price hikes of the 1970 maintaining that economically justified improvement in energy efficiency led to higher levels of energy consumption at the economy wide level than in the absence of any efficiency response more fundamentally he argues that there is no case for preferentially singling out energy from among all the resources available to us for efficiency maximization the least damaging policy is to determine targets enact the restrictive measures needed to curb consumption and then leave it to consumers intermediate and final to reallocate all the resources available to them to best effect subject to the new enacted constraints and any others they might be experiencing there is no reason to suppose that it is right for all the economic adjustment following a new resource constraint to take the form of improvements in the productivity of that resource alone as many others have argued any action to impose resource constraint entails an inevitable economic cost in the shape of a reduction in production and consumption possibilities there would be no free lunch in the last few years debate about the validity of these contentions has blossomed especially under the influence of writers on the western side of the atlantic in this contribution the author outlines the original arguments for questioning whether raised efficiency leads to lower consumption reports more recent developments and offers some insights as food for further thought