asset transformation and the challenges to servitize a utility business model abstract the traditional energy utility business model is under pressure and energy services are expected to play an important role for the energy transition experts and scholars argue that utilities need to innovate their business models and transform from commodity suppliers to service providers the transition from a product oriented capital intensive business model based on tangible assets towards a service oriented expense intensive business model based on intangible assets may present great managerial and organizational challenges little research exists about such transitions for capital intensive commodity providers and particularly energy utilities where the challenges to servitize are expected to be greatest this qualitative paper explores the barriers to servitization within selected swiss and german utility companies through a series of interviews with utility managers one of them is asset transformation the shift from tangible to intangible assets as major input factor for the value proposition which is proposed as a driver for the complexity of business model transitions managers need to carefully manage those challenges and find ways to operate both new service and established utility business models aside policy makers can support the transition of utilities through more favorable regulatory frameworks for energy services and by supporting the exchange of knowledge in the industry

pro environmental households and energy efficiency in spain the residential building sector is a major driver of current and future energy consumption and associated emissions which can be potentially mitigated through significant energy efficiency ee improvements in both emerging and developed countries yet there are several persistent barriers that hinder the attainment of ee improvements in this area using data from a 2008 national representative survey of spanish households this paper is interested in the determinants of ee related decisions in particular a discrete choice model empirically analyzes whether pro environmental households are more likely to invest in ee and to adopt daily energy saving habits we show that households with eco friendly behaviors are more likely to investment in well differentiated ee measures as well as to steer daily habits towards energy savings however no effects are found for households with environmental attitudes based on stated willingness to pay to protect the environment in addition to this households belonging to higher income groups and education levels are more likely to invest in ee but not to adopt energy saving habits while households with older members are less likely to invest in ee and show fewer eco friendly habits

a note on competitive investment under uncertainty uncertainty over future output prices or input costs can affect investment by a riskneutral firm in two opposing ways first it can increase the value of the marginal unit of capital which leads to more investment this only requires that the stream of future profits generated by the marginal unit be a convex function of the stochastic variable by jensen s inequality the expected present value of that stream is increased this result was demonstrated by richard hartman 1972 and later extended by andrew abel 1983 and others in their models constant returns to scale and the substitutability of capital with other factors ensure that the marginal profitability of capital is convex in output price and input costs even with fixed proportions however this convexity can result from the ability of the firm to vary output so that the marginal unit of capital need not be utilized at times when the output price is low or input costs are high if investment is irreversible and can be postponed a second effect of uncertainty is to create an opportunity cost of investing now rather than waiting for new information to arrive before committing resources this increases the full cost of investing in a marginal unit of capital which reduces investment 2 hence the net effect of uncertainty on irreversible investment depends on the size of this opportunity cost relative to the increase in the value of the marginal unit of capital the sign of the net effect is significant because of its possible policy implications pindyck 1988 and giuseppe bertola 1989 developed models in which a firm faces a downward sloping demand curve and found the net effect to be negative ricardo caballero 1991 has recently studied investment by an individual firm facing a stochastically shifting demand curve he shows that as returns to scale become constant and the elasticity of demand faced by the firm rises this opportunity cost of investing now rather than waiting approaches zero thus in the limit of constant returns and an infinitely elastic demand curve an increase in uncertainty tends to raise rather than decrease current investment even if that investment is irreversible it is important to stress that caballero s limiting result treats the firm in isolation and describes the effect of a meanpreserving increase in price uncertainty and not an increase in industry wide demand uncertainty this note shows that in a competitive market the key interactions between irreversibility and uncertainty occur at the industry level and can only be understood by making price and industry output endogenous 3 doing so restores the positive opportunity cost associated with irreversible investment in addition caballero s result is based on a model with convex adjustment costs an innovative aspect of the model is that these costs can be asymmetric thereby allowing for partial or complete irreversibility complete irreversibility corresponds to a cost of massachusetts institute of technology cambridge ma 02139 this work was supported by the national science foundation under grant no ses 8618502 and by mit s center for energy policy research my thanks to julio rotemberg and especially ricardo caballero for very helpful comments and discussions 1then the marginal profit of capital at each time t in the future is max o pt ct where ct is variable cost thus a unit of capital represents a set of all options on future production which are worth more the greater the variance of pt or ct 2for a detailed discussion of this point and a survey of the recent literature on irreversibility and its implications for investment and market evolution see pindyck 1991 3studies that make price endogenous include steven lippman and richard rumelt 1985 avinash dixit 1989 1991 and john leahy 1990

government funded renewable energy innovation in china abstract with the rapid development of the economy china is facing pressures caused by traditional energy deficiency and environmental pollution in recent years which has forced the chinese government to start to pay attention to the development and utilization of renewable energy re this article based on data and statistics available up to 2008 studies features of china s re technology innovation and problems thereof it finds that national science and technology programs are the main aspect of china s re technology innovation and most of r d funds for the re technology come from china s three main national programs besides the overall expenditures on re technology innovation constitute only a small proportion of china s total domestic r d funding and seem not enough this paper also finds that compared with research and development stages of re technology the demonstration and diffusion of re technology in china are given less attention and thus are relatively less sufficient furthermore influenced by china s traditional scientific research system there appears lack of sufficient incentives and opportunities for private sectors to fully participate in re technology innovation because most national programs are undertaken by universities or research institutes

after the paris agreement measuring the global decarbonization wedges from national energy scenarios the new bottom up approach of the paris agreement calls for a better understanding of the domestic dimension of development pathways and of the implications for global emissions trajectory to this end it is of strategic importance to provide a common framework that makes it possible to identify the key decarbonization wedges at the national level and to highlight the potential benefits of international cooperation the article proposes an advanced index decomposition analysis methodology based on sectoral energy service indicators and on a specific decomposition in the power sector for quantifying the contribution of different mitigation strategies it is applied to national deep decarbonization pathways elaborated in the deep decarbonization pathway project ddpp by the sixteen largest ghg emitting countries in a global perspective the results reveal the key role of energy efficiency and decarbonization of energy carriers in the industry sector deployment of renewables in the power sector and to a lesser extent coal gas substitution and efficiency and energy decarbonization in the transport sector the analysis also calls for a deeper understanding of the role a reduction in energy service demand can play in mitigation scenarios and of the respective contribution for industry of energy efficiency and structural change

international evidence on investment and fundamentals abstract if a firm s costs of installing capital are not quadratic then its optimal investment is not a linear function of fundamentals such as the returns and costs of capital this study specifies a model in which a firm may face fixed linear and convex costs of investing and estimates the resulting investment function using firm level data from 11 countries the evidence suggests important nonlinearities consistent with the presence of fixed or other non quadratic costs in the relationship between investment and fundamentals for most countries these findings are statistically signficant at the level of the firm and economically significant when aggregated by country

world wide non mandatory involvement of electricity utilities in the promotion of energy efficiency and the portuguese experience abstract the interest in the promotion of energy efficiency by utilities at the demand side started in the seventies caused by the high prices of oil and suffered a drastic set back during the restructuring of the electricity sector however growing awareness on the positive effects of energy efficiency on the economy and on the environment led many countries jurisdictions to impose utilities engagement in the promotion of energy efficiency in other countries jurisdictions utilities encourage their customers to improve energy efficiency on a non mandatory basis in this paper the non mandatory involvement of electric utilities in the promotion of energy efficiency at the demand side is addressed some world wide examples are given detailing the portuguese experience although this participation is important it seems that countries jurisdictions with regulatory impositions obtain more satisfying results

energy efficiency and financial literacy abstract financial literacy explains anomalies in a wide range of consumers financial decisions we extend the literature on financial literacy by examining its role in the purchase of energy consumer durables a setting purported to suffer from sub optimal levels of investment due to consumer mistakes we augment a standard choice experiment for purchasing a hot water system with data on financial literacy financial literacy is an economically important and statistically significant determinant of investment in energy efficiency this result is robust to incorporating individual discount rates and risk aversion as well as standard controls such as income and education indicating that financial literacy is not merely a proxy for standard demographic characteristics financial literacy also makes choices more consistent with standard consumer preferences and increases the probability that respondents select investments with the lowest lifetime discounted costs the results establish low financial literacy as a mechanism driving low investment in energy efficiency

the misleading effect of energy efficiency information on perceived energy friendliness of electric goods the european union energy label informs consumers at the point of sale about the energy efficiency and electricity consumption of various electric goods the label should enable consumers to purchase energy friendly products i e products with low energy consumption thereby making a significant contribution to the reduction of overall energy consumption this paper offers a systematic analysis of consumers interpretation of the energy label the results of a set of experimental studies revealed that consumers tend to base their estimates of a product s energy consumption mainly on the energy efficiency class e g a communicated on the energy label and largely ignore information about annual electricity consumption e g 120 kwh year thereby consumers potentially overestimate the energy friendliness of a product assigned a high energy efficiency rating this also holds true when consumers directly compare two products in terms of energy friendliness thus participants chose a higher consuming product because it had a high energy efficiency rating high energy efficiency ratings e g a can distort consumers perceptions of product categories that consume excessively e g freezers participants were seduced into thinking that a high energy efficiency rating e g a means the energy consumption of energy hogs is no longer problematic this paper provides evidence that the energy label could have a contrary effect than the one intended due to people s susceptibility to an energy efficiency fallacy this misinterpretation of the energy label could further explain why overall energy demand is increasing despite enhanced energy efficiency finally implications for policy makers and further research for enhancement of the energy label are discussed

factors impacting investments in energy efficiency and clean technologies empirical evidence from slovenian manufacturing firms abstract promoting energy efficiency is one of the top priorities of the eu energy strategy manufacturing is identified there as one of the sectors holding the potential for substantial energy efficiency improvements this paper therefore examines factors impacting firms decisions to invest in energy efficiency and clean technologies drawing on the energy efficiency gap literature the impact of three groups of factors is analysed namely economic firm specific characteristics and market drivers organisational and regulatory employing probit and bivariate probit models on a panel data set for 848 slovenian manufacturing firms over 7 years 2005 2011 the paper finds that decisions to invest in energy efficiency and in clean technologies are impacted by similar yet not identical factors the following factors significantly increase the likelihood of both energy efficiency and clean technology investments share of energy costs market share and export orientation importantly other types of investments except for investments in the expansion of existing capacities do not crowd out energy efficiency or clean technology investments on the other hand foreign ownership and managers expectations of future demand only impact energy efficiency investments while clean technology investments are influenced by managers expectations of the future business condition of the firm further the economic and financial crisis reduces the likelihood of clean technology investments but not energy efficiency investments this is explained by the fact that investments in energy efficiency represent a cost effective solution for the firm the same argumentation can be used to explain why high energy costs also play an important role for investments in clean technology in addition the likelihood to invest is found to be importantly influenced by industry specific characteristics which captures the effect of industry differences in environmental regulation and other conditions the paper adds to the existing literature in three important ways it employs data on actual rather than intended investments it examines investment decisions over a number of years thereby allowing for an analysis of the impact of the recession on firms decisions and it examines relationships among different types of investments accounting for a potential crowding out effect based on the paper s findings it can be concluded that the energy efficiency gap is less likely to exist in large and well performing firms implying that policy measures should primarily target less energy intensive small and medium sized enterprises

residential consumption of gas and electricity in the u s the role of prices and income abstract we study the residential demand for electricity and gas working with nationwide household level data that cover recent years namely 1997 2007 our dataset is a mixed panel multi year cross sections of dwellings households in the 50 largest metropolitan areas in the united states as of 2008 we estimate static and dynamic models of electricity and gas demand we find strong household response to energy prices both in the short and long term from the static models we get estimates of the own price elasticity of electricity demand in the 0 860 to 0 667 range while the own price elasticity of gas demand is 0 693 to 0 566 these results are robust to a variety of checks contrary to earlier literature metcalf and hassett 1999 reiss and white 2005 we find no evidence of significantly different elasticities across households with electric and gas heat the price elasticity of electricity demand declines with income but the magnitude of this effect is small these results are in sharp contrast to much of the literature on residential energy consumption in the united states and with the figures used in current government agency practice our results suggest that there might be greater potential for policies which affect energy price than may have been previously appreciated

cognitive reflection and the valuation of energy efficiency abstract based on a stated choice experiment among about 3 600 german households heads on the purchase of electricity using durables this paper explores how cognitive reflection influences consumers valuation of energy efficiency and investigates the interaction with consumers response to the eu energy label our results indicate that consumers with low cognitive reflection value energy efficiency less furthermore we demonstrate that consumers with a low level of cognitive reflection primarily choose appliances based on grade like energy efficiency classes rather than detailed information on annual energy use

heterogeneity in price sensitivity and retail price discrimination the nature of heterogeneity in price sensitivity has considerable implications for research in the study of retail price formation new data collection technologies have become available that allow firms to gather detailed information on household demographics and purchase histories using these new methods it is increasingly feasible for a firm to perform demand estimation at the demographic group or even the household level with household demand estimates in hand a firm can offer individualized discounts engaging in nearperfect price discrimination the nature of heterogeneity in household price response has implications for how firms might be able to extract surplus from consumers through individualized pricing price discrimination has long held the interest of economists interested in the pricing of retail food products the types of price discrimination traditionally discussed in food retailing are secondand third degree price discrimination second degree price discrimination involves self selection on the part of consumers where sellers offer price quantity or price quality bundles designed to attract different consumer types well known examples of second degree price discrimination are quantity discounts or coupons issued in newspaper supplements magazines or mass mailings third degree price discrimination arises when retailers charge different prices to different market segments according to the demand elasticity of each segment for example retailers might charge different prices at different retail outlets or offer discounts to identifiable groups such as students or senior citizens

on measuring energy poverty in indian households summary the relationship between energy and poverty is obvious and goes both ways recognizing this this paper provides a short overview of different approaches to measuring energy poverty it then presents a novel two dimensional measure of energy poverty and energy distribution that combines the elements of access to different energy types and quantity of energy consumed an assessment of the extent of energy poverty and changes in energy distribution pattern are analyzed by applying this measure to indian household survey data for 1983 2000 the analysis shows a significant reduction in the level of energy poverty and a rapidly developing subcontinent the new measure is a good complement to conventional monetary measures and is general enough to be applied to other developing countries

review of us esco industry market trends an empirical analysis of project data abstract this comprehensive empirical analysis of us energy service company esco industry trends and performance employs two parallel analytical approaches a survey of firms to estimate total industry size and a database of 1500 esco projects from which we report target markets and typical project characteristics energy savings and customer economics we estimate that industry investment for energy efficiency related services reached us 2 billion in 2000 following a decade of strong growth esco activity is concentrated in states with high economic activity and strong policy support typical projects save 150 200 mj m2 year and are cost effective with median benefit cost ratios of 1 6 and 2 1 for institutional and private sector projects the median simple payback time spt is 7 years among institutional customers 3 years is typical in the private sector reliance on dsm incentives has decreased since 1995 preliminary evidence suggests that state enabling policies have boosted the industry in medium sized states escos have proven resilient in the face of restructuring and will probably shift toward selling energy solutions with energy efficiency part of a package we conclude that appropriate policy support both financial and non financial can jump start a viable private sector energy efficiency services industry that targets large institutional and commercial industrial customers

consumer myopia imperfect competition and the energy efficiency gap evidence from the uk refrigerator market abstract the empirical literature on the energy efficiency gap concentrates on demand inefficiencies in the energy using durables markets and finds evidence that consumers underestimate future energy costs when purchasing a new appliance we take a broader view and also consider the impact of imperfect competition using data on the uk refrigerator market 2002 2007 we find that the average energy consumption of appliances sold during this period was only 7 2 higher than what would have been observed under a scenario with a perfectly competitive market and non myopic consumers one reason for this small gap is that market power actually reduces energy use

linking consumer energy efficiency with security of supply most modern energy policies seek to achieve systematic ongoing incremental increases in consumer energy efficiency since this contributes to improved security of supply favourable environmental outcomes and increased economic efficiency yet realised levels of efficiency are typically well below the most cost effective equilibrium due to variety of behavioural and organisational barriers which are often linked to information constraints in addition efficient users are normally unrewarded for collective benefits to system security and to the environment thus reducing the incentives for energy consumers to invest in efficiency improvements this paper examines the dichotomies and symmetries between supply and demand side solutions to energy security concerns and reviews opportunities to overcome barriers to improved consumer efficiency a security market is identified as a mechanism to promote both demand and supply side investments that support electricity system security such a market would assist in setting the optimal quantity of reserves while achieving an efficient balance between supply and demand side initiatives it would also help to smooth overall investment throughout the energy system by encouraging incremental approaches such as distributed generation and demand side alternatives where they provide competitive value although the discussion is applicable to energy systems in general it focuses primarily on electricity in new zealand

making the implicit explicit a look inside the implicit discount rate implicit discount rates idrs are employed in energy models to capture household investment decisions yet the factors behind the idr and their respective implications for policy making usually remain blurred and fractional the proposed comprehensive framework distinguishes three broad categories of factors underlying the idr for household adoption of energy efficient technologies eets preferences notably over time risk loss debt and the environment predictable ir rational behavior bounded rationality rational inattention behavioral biases and external barriers to energy efficiency existing empirical findings suggest that the factors underlying the idrs that differ across household characteristics and technologies should be accounted for in energy models furthermore the framework allows for a fresh look at the interplay of idrs and policies we argue that a simple observation of high idrs or observing correlations between idrs and socio economic characteristics does not provide guidance for policy making since the underlying sources cannot be identified instead we propose that some of the factors underlying the idr notably external barriers can be changed through directed policy interventions whereas other factors notably preferences and predictable ir rational behavior are innate and can only be taken into account through reactive policy interventions

profiting from negawatts reducing absolute consumption and emissions through a performance based energy economy abstract current energy and ghg emissions policies either focus directly on emissions or promote renewable production and the implementation of specific efficiency measures meanwhile the fundamental structure of the energy market based on profits through energy throughput remains largely unchallenged this policy oversight prevents the transition to an energy economy in which profits are based on energy services delivered at the lowest energy cost a performance based energy economy pbee the pbee applies the combined concepts of the performance economy and energy services to the energy sector energy service companies escos are discussed as an example of pbee practices the implications for energy suppliers and consumers as well as the conditions for pbee diffusion and consequences for technological change are also explored the expected environmental social and economic benefits are described however absolute consumption and emissions reductions may prove elusive due to the rebound effect in order to forestall rebound led increases complementary policy measures likely to lead to absolute reductions are required

nonconvex factor adjustments in equilibrium business cycle models do nonlinearities matter recent empirical analysis has found nonlinearities to be important in understanding aggregated investment using an equilibrium business cycle model we search for aggregate nonlinearities arising from the introduction of nonconvex capital adjustment costs we find that while such costs lead to nontrivial nonlinearities in aggregate investment demand equilibrium investment is effectively unchanged our finding based on a model in which aggregate fluctuations arise through exogenous changes in total factor productivity is robust to the introduction of shocks to the relative price of investment goods

designing incentive schemes for promoting energy efficient appliances a new methodology and a case study for spain the energy efficiency gap has been high on research and policy agendas for several decades incentive schemes such as subsidies taxes and bonus malus schemes are widely used to promote energy efficient appliances most research however considers instruments in isolation and only rarely in the context of political constraints on instrument use or for alternative policy goals this paper presents a methodology for the optimal design of incentive schemes based on the minimisation of dead weight loss for different policy goals and policy restrictions the use of the methodology is illustrated by designing optimal combinations of taxes and subsidies in spain for three types of appliance dishwashers refrigerators and washing machines the optimal policies are designed subject to different policy goals such as achieving a fixed reduction in emissions or a certain increased market share for efficient appliances and for policy constraints such as budget neutrality the methodology developed here can also be used to evaluate past and current incentive schemes

energy saving and energy efficiency concepts for policy making departing from the concept of rational use of energy the paper outlines the microeconomics of end use energy saving as a result of frugality or efficiency measures frugality refers to the behaviour that is aimed at energy conservation and with efficiency we refer to the technical ratio between energy input and output services that can be modified with technical improvements e g technology substitution changing behaviour from one side and technology from the other are key issues for public energy policy in this paper we attempt to identify the effects of parameters that determine energy saving behaviour with the use of the microeconomic theory the role of these parameters is crucial and can determine the outcome of energy efficiency policies therefore policymakers should properly address them when designing policies

demand side management overcoming market barriers or obscuring real costs abstract this paper compares two approaches to estimating the net benefits of a demand side management program that subsidizes the purchase of efficient equipment the total resource cost trc test suggests net benefits of us 6 9 million estimates based on consumer s surplus yield an estimated net loss of us 6 3 million this gap is due to differences in estimates of participants net benefits market failures do not appear to be significant and thus cannot explain much of the gap the more plausible explanation is that the trc uses a lower discount rate than participants use for themselves and it omits some costs

energy paradox and political intervention a stochastic model for the case of electrical equipments abstract this paper develops a model that explains the delay of decisions to adopt profitable energy saving investments this problem is known as the energy paradox the model rationalizes the profitability requirements raised by the irreversibility the uncertainty and the decrease of costs as a result of learning by doing in this context the wait gives investors more visibility and more lower investment costs which gives them an option value the representative agent has an interest to postpone its energy saving decision until future benefits increase and equalize its required option value formally we internalize these explanatory factors in a stochastic model where the updated energy saving benefits follows a geometric brownian motion to affirm the capacity of the model we generate simulation results for two equipments for electrical uses beyond that we extend the model to simulate the effects of energy policy instruments to promote adoption of such equipments simulations prove that the taxation of energy prices is likely to be more effective than the subsidy for energy saving equipments it is also found that the combination of these instruments amplifies the adoption of energy saving equipments and generates very favorable economic and environmental externalities

efficiency effectiveness and implementation feasibility of energy efficiency rebates the renove plan in spain abstract state sponsored incentive policies frequently include subsidies or rebates for the purchase of more efficient appliances however more research is required into the effects of this tool in isolation a case in point is the so called renove plan in spain first the inefficiency losses dead weight losses associated with energy efficiency rebates must be taken into account such a policy may also encourage the large scale purchasing of energy efficient appliances which may finally result in an increase in electricity consumption rebound effect furthermore although a subsidy is more widely accepted than other tools from social and political viewpoints especially than taxes the fiscal consolidation challenge faced by many countries reduces the scope for environmental policy measures on the expenditure side of the budget and strengthens the need to use taxes to meet the agreed policy objectives this paper shows that the current application of the spanish renove plan with rebates on the dishwasher market for energy efficient appliances generates some welfare losses a rebound effect and a considerable deficit in public budgets the paper examines and assesses the effect of different combinations of taxes and rebates in the case of dishwashers in spain based on their performance in terms of economic efficiency environmental effectiveness and implementation feasibility

dynamic incentives of environmental regulations the effects of alternative policy instruments on technology diffusion abstract we develop a framework for comparing empirically the effects of alternative environmental policy instruments on the diffusion of new technology market based and command and control approaches can he quantitatively compared by estimating the economic penalty that firms through their actions reveal to be associated with violation of standards in the context of concerns about global climate change we empirically examine the likely effects of pigouvian taxes technology adoption subsidies and technology standards we employ state level data on the diffusion of thermal insulation in new home construction comparing the effects of energy prices insulation cost and building codes

catalysing the energy service market the role of intermediaries the uk market for energy service contracts is expanding owing in part to the emergence of intermediaries for those contracts in different parts of the public sector these intermediaries combine a legal framework for establishing contracts with an organisational framework that facilitates contract negotiation and execution this paper examines the nature and operation of these intermediaries in more detail including their achievements to date and their similarities and differences it uses ideas from transaction cost economics to develop a theoretical model of the contracting decision and shows how intermediary organisations can lower the transaction costs incurred by both clients and contractors thereby increasing the viability of contracting the paper argues that intermediaries can play an important role in expanding the market for energy service contracts and hence in delivering cost effective energy efficiency improvements throughout the public sector

measuring market power in the ready to eat cereal industry the ready to eat cereal industry is characterized by high concentration high price cost margins large advertising to sales ratios and numerous introductions of new products previous researchers have concluded that the ready to eat cereal industry is a classic example of an industry with nearly collusive pricing behavior and intense nonprice competition this paper empirically examines this conclusion in particular i estimate price cost margins but more importantly i am able empirically to separate these margins into three sources i that which is due to product differentiation ii that which is due to multi product firm pricing and iii that due to potential price collusion the results suggest that given the demand for different brands of cereal the first two effects explain most of the observed price cost margins i conclude that prices in the industry are consistent with noncollusive pricing behavior despite the high price cost margins leading firms are able to maintain a portfolio of differentiated products and influence the perceived product quality it is these two factors that lead to high price cost margins

explaining investment dynamics in u s manufacturing a generalized s s approach we are grateful to olivier blanchard whitney newey james stock an editor three anonymousreferees and seminar participants at brown cepr champoussin chicago columbia econometric society meetings caracas and tokyo efcc harvard impa lse nber princeton rochester site toronto u de chile and yale for their comments financial support to caballero from the national science and sloan foundations and to engel from fondecyt grant 195 510 and the mellon foundation grant 9608 is gratefully acknowledged 2since plants entry is excluded from their sample these statistics are likely to represent lowerbounds on the degree of lumpiness in plants investment patterns 3we use the word project to emphasize the fact that the actual implementation of a projectmay cover more than a year observation realistic time to build aspects of investment are not incontradiction with the view that investment episodes are lumpy in nature 4 see chirinko 1994 for a survey of the empirical investment literature

carbon taxation in russia prospects for a double dividend and improved energy efficiency russia is not only one of the world s major sources of carbon based energy coal oil and gas but is also one the most intensive users of energy furthermore russia accounts for a disproportionately large share of global carbon dioxide emissions some 5 to 6 of global carbon dioxide emissions eia 2011a it has been estimated world bank 2008 that russia could reduce its use of primary energy use by 45 with consequent economic and environmental benefits high energy and carbon intensity of the russia economy is inter alia explained by low energy prices due to high export taxes as well as administrative regulation of domestic prices of gas and electricity and low environmental taxes carbon taxes are one such pigouvian tax and they would address concerns on several fronts simultaneously in the short to medium term they would inter alia lead to lower ghg emissions and encourage the diffusion of more energy efficient technologies in the longer term the increased cost of energy inputs is expected to induce technological progress in this analysis the macroeconomic and sectoral effects of carbon taxes on the russia economy are examined this analysis addresses the following objectives i to test the double dividend hypothesis under perfect and imperfect competition in output markets to analyse ii the incidence of carbon taxes iii impacts on sectoral competitiveness iv effects on income equity and v interactions of carbon taxes with other taxes a computable single country multi sector comparative static cge model is employed russland verfugt nicht nur uber einen der grosten vorrate an kohlenstoffbasierter energie wie kohle rohol und gas sondern ist auch einer der grosten energieverbraucher daruber hinaus ist russland fur einen uberproportional grosen anteil von kohlendioxid emission etwa 5 bis 6 der weltweiten kohlendioxidemission verantwortlich mit der einfuhrung einer kohlendioxidsteuer konnten gleichzeitig unterschiedliche wirkungen erzielt werden kurz und mittelfristig wurden kohlenstoffsteuern sowohl zu einer reduzierung von treibhausgasemissionen als auch zur einfuhrung von energieeffizienteren technologien fuhren langfristig wird erwartet dass hohe energiekosten den anreiz zur entwicklung und zur investition in energiesparenden technischen fortschritt erhohen die vorliegende arbeit analysiert und bewertet die makrookonomischen und sektoralen auswirkungen einer einfuhrung von kohlenstoffsteuern auf die russische wirtschaft die ziele der arbeit bestehen darin die hypothese der doppelten dividende fur den fall des vollkommenen und des unvollkommenen wettbewerbs auf gutermarkten zu uberprufen und die inzidenz einer kohlenstoffsteuer ihre auswirkungen auf die sektorale wettbewerbsfahigkeit ihre auswirkungen auf die einkommensverteilung und die interaktion von kohlenstoffsteuern mit anderen steuern zu analysieren und zu bewerten als methodischer ansatz wurde ein single country und multi sektor model gewahlt

costs and benefits of energy efficiency obligations a review of european programmes abstract the economics of energy efficiency programmes have been subject to considerable academic debate lasting well over three decades now in this paper we contribute to this debate by reviewing the costs and benefits of a specific type of policy instrument that recently gained significant traction in europe energy efficiency obligations eeos following the introduction of the eu energy efficiency directive in 2012 the number of eeos in europe has grown from five schemes to now 16 eeos in operation or planned across the eu there is an emerging body of evidence on the costs and benefits of energy efficiency obligations covering a wider range of eu countries which offers an opportunity to improve our understanding of the economics of energy efficiency obligations in this paper we draw on this new data and provide a a comparative analysis of the costs and benefits of eeos in a number of european countries b discuss the uncertainties and challenges around calculating the costs and benefits of energy efficiency obligations and c provide a categorisation of the multiple benefits often overlooked in cost benefit analyses

consumer responses towards home energy financial incentives a survey based study abstract residential energy efficient and renewable energy eere products play an important role in energy conservation and carbon emissions reduction various financial incentive programs have been developed to promote the adoption of these products however their effectiveness in attracting consumers is not very well understood in this study we investigated impacts of financial incentives on homeowner s decision making towards six eere products two forms of incentives tax credits and interest free loans were examined through a household mailing survey in florida the united states results showed that although half of the respondents were interested in eere products the high investment cost was a major concern that hindered their purchase activities homeowners were attracted to financial incentives and valued tax credits much higher than interest free loans the current federal home energy tax credit levels were found to attract only 2 12 percent of homeowners to buy eere products the willingness of participation was especially low for the costly products such as solar panels the participation rate was also very low for lower income i e annual household income below 50 000 families living in older residences this study contributes to the understanding of economic and social aspects of consumer decision making on energy efficiency and alternative energy

the value of social networks in the diffusion of energy efficiency innovations in uk households abstract the uk government has policy goals for increasing energy efficiency in existing homes however there are doubts that standard technology and behavioural innovations will be adopted widely enough in time to achieve the targets diffusion of innovation theory states that the communication of information on innovations through a social system encourages adoption social capital theory states that interpersonal communication is a key means of gaining resources such as information on energy efficiency innovations for attaining certain goals case study research of three british communities was conducted in 2009 in order to understand the influence of social capital on information diffusion regarding the adoption of household energy efficiency measures the findings show that while standard campaigns may account for two thirds of information seeking behaviour they may not be addressing up to one third of information seekers who would prefer to speak to people they know findings also indicate that seeking information amongst personal contacts is often associated with adoption of energy efficiency innovations increasing the likelihood of adoption by up to four times but that there are important differences between types of innovations and communities tailoring campaigns to communities communication channels is therefore imperative these findings have important implications for informing community based energy efficiency programmes

power markets in transition decarbonization energy efficiency and short term demand response abstract energy efficiency and short term demand response are key issues in the decarbonization of power markets however their interaction and combined impact on market prices as well as on the supply side is yet to be understood we develop a framework to implement short term demand response and investments in energy efficiency in detailed partial equilibrium power market models we quantify our results using the eu regen model for the european power market under an 80 emission reduction target energy efficiency contributes only 11 of carbon emission reductions intermittent renewable energies such as wind and solar power account for the major share of 53 in comparison to a scenario without short term demand response and energy efficiency investments 70 gw gas power is decommissioned immediately and 180 gw less gas capacity is needed in 2050 which underlines the need for immediate action by policy makers to avoid locking the eu power market into an inefficient path

on the sign of the investment uncertainty relationship understanding the effects of uncertainty over any decision variable has fascinated economists for a long time risk aversion and incomplete markets are likely to make the investment uncertainty relationship negative e g roger craine 1989 joseph zeira 1989 what happens in the absence of risk aversion and incomplete markets is however ambiguous richard hartman 1972 and andrew b abel 1983 1984 1985 found that in the presence of symmetric convex costs of adjustment mean preserving increases in price uncertainty raise investment of a competitive firm as long as the profit function is convex in prices on the other hand the recent literature on irreversible investment e g robert s pindyck 1988 giuseppe bertola 1988 has shown that increases in uncertainty lower investment all these results have been derived under either risk neutrality or complete markets intuition suggests that the explanation for such a difference lies with the asymmetric nature of adjustment costs in the irreversible investment case as compared with the symmetry of the adjustment cost mechanisms proposed by abel and hartman although this intuition is confirmed in this paper asymmetric adjustment costs are shown not to be sufficient to explain why the results differ in fact a more hidden but at least as important difference between these two literatures is that the former assumes perfect competition and constant returns to scale whereas the latter assumes either imperfect competition or decreasing returns to scale or both 2 the purpose of this paper is to highlight the role of the decreasing marginal return to capital assumption due to either imperfect competition or decreasing returns to scale or both in determining the effects of adjustment cost asymmetries on the sign of the response of investment to changes in uncertainty under risk neutrality for this the paper develops a simple model with a cost of adjustment mechanism general enough to consider both symmetric convexity and irreversibility as special cases one of the most important findings is the lack of robustness of the negative relationship between investment and uncertainty under asymmetric adjustment costs3 to changes in the degree of competition in fact when firms are nearly competitive the conclusion of hartman and of abel holds no matter how asymmetric adjustment costs are studying adjustment cost mechanisms has a central role in understanding the dynamics of investment and its business cycle implications but conclusive results about the sign of the instantaneous relationship between uncertainty and investment should not be department of economics columbia university new york ny 10027 i am grateful to giuseppe bertola prajit dutta glen hubbard anil kashyap richard lyons and the referees for their useful comments 1the financial literature on investment has considered risk aversion through a premium in the discount rate determined by the capm capital asset pricing model intertemporal capm or consumption capm however often this discount rate is left unchanged when studying the response of investment to uncertainty changes e g pindyck 1988 pp 974 5 thereby omitting the effect of changes in uncertainty on investment due to risk aversion and incomplete markets 2in the typical version of the irreversible investment problem there is no cost of upward adjustments thus imperfect competition and or decreasing returns to scale are required to bound the size of the firm 3in this paper asymmetric adjustment cost refers to the case in which it is more expensive to adjust downward than upward certainly the opposite case is a trivial extension of the case studied in this paper

potential dietary outcomes of changing relative prices of healthy and less healthy foods the case of ready to eat breakfast cereals abstract many prevalent and costly health disorders in the u s can be attributed in part to poor diets overconsumption of calories and physical inactivity taxing less healthy foods and subsidizing healthy foods as a strategy to improve diet and health has attracted growing interest among policy makers and researchers we test this strategy by using national household purchase data to estimate a censored price and expenditure endogenous demand system for 12 food groups that are commonly consumed at breakfast low and high nutrition ready to eat breakfast cereals eggs breads hot cereals breakfast bars juice whole and reduced fat milk yogurt meats and coffee the estimated demand elasticities are applied to nationally representative food intake data to simulate under the assumption of perfectly price elastic supply the potential dietary improvement from taxing low nutrition and subsidizing high nutrition ready to eat breakfast cereals we find that the demand for both types of cereals is own price inelastic suggesting that consumers are not likely to make large shifts in consumption of cereals if the price changes thus only limited dietary improvement can be expected from taxes and subsidies furthermore when the healthfulness of breakfast foods is evaluated using a comprehensive list of nutrients and food components a price intervention strategy may result in unintended adverse impacts our simulation results suggest that the hypothetical price intervention actually increases the calorie content of foods consumed at breakfast

what encourages local authorities to engage with energy performance contracting for retrofitting evidence from german municipalities municipalities aiming at mitigating climate change by implementing new energy efficiency technologies face budgetary and capacity constraints outsourcing through energy service contracting could provide a solution this paper reports results from a survey of 1298 municipalities concerning barriers to retrofitting public street lighting and the possible role of energy service contracting to overcome these barriers using a logistic regression analysis the authors investigate determinants of opting for energy service contracts in the specific context of led retrofits results point to an advantage of outsourcing in a financially and capacity constrained environment which corresponds with the main reasons for engaging in contracting minimising investments and financial risks however municipalities often do not fully grasp the risks associated with retrofitting especially using a novel technology such as led in relation to that they underestimate the risk reduction potential of energy performance contracts epc previous experience with outsourcing increases the probability to engage in servitization although certain existing partnerships particularly with utilities prevent municipalities from considering energy performance contracts interestingly engaging an energy consultant has a negative propensity to use energy service contracts while pre negotiated standardised contracts for energy performance contracts have a positive influence

investment dynamics with information costs investment in physical capital at the micro level is infrequent and large or lumpy the most common explanation for this is that firms face non convex physical adjustment costs the model developed in this paper shows that information costs make investment lumpy at the micro level even in the absence of non convex adjustment costs when collecting and processing information is costly the firm optimally chooses to do it sporadically and to be inactive most of the time this behavior results in infrequent and possibly large capital adjustments the model fits plant level investment rate moments well and it also matches some higher order moments of aggregate investment rates keywords investment dynamics information costs inattentiveness lumpy investment jel classification d21 d83 d92 e22

rethinking and reshaping the climate policy literature review and proposed guidelines abstract addressing climate change represents a governing the climate commons on a global scale the tragedy of the commons might better be described as the failure of governing the commons hardin s solutions were centralized government and private property which have long been criticized as oversimplified however governing the unprecedented climate commons there is only a global federalism of climate policy the kyoto protocol the kyoto cannot keep atmospheric co2 level below 450 ppm rising 2 c some key evidences of the kyoto failures are identified the kyoto failures do not indicate that the kyoto is a wrong tool of centralized government instead the kyoto failures are derived from the fact that the only centralized government cannot effectively govern the commons which have been proven by the efforts of governing the commons last four decades here we propose a wide diversity of governance systems for climate common to addressing global warming the multi level and multi scale governing system includes but is not limited to i starting at home ii emphasizing the local approach iii efforts of global level focusing these top emitters iv improved information sharing v privatizing the property of climate to avoid free riders vi combination mitigation with adaptive vii improved ecology services to expand carbon sinks we argue that the kyoto failures indicate again that reliance on a single solution may result in more of a problem than a solution in governing the common therefore continuing to wait for another global federalism of climate policy may lead to missing the chance to make significant mitigations and adaptations in time to battling the climate change post 2012 multi level and multi scale approaches could make a difference in collective action for governing the climate commons to meet climate challenge

improving behavioral realism in hybrid energy economy models using discrete choice studies of personal transportation decisions hybrid energy economy models combine top down and bottom up approaches to explore behaviorally realistic responses to technology focused policies this research uses empirically derived discrete choice models to inform key behavioral parameters in cims a hybrid model the discrete choice models are estimated for vehicle and commuting decisions from a survey of 1150 canadians with the choice models integrated into cims we simulate carbon taxes gasoline vehicle disincentives and single occupancy vehicle disincentives to show how different policy levers can motivate technological change we also use the empirical basis for the choice models to portray uncertainty in technological change costs and emissions

information cost and consumer choices of healthy foods this article examines whether or not a reduction in consumer search cost for nutritional information increases the probability that heterogeneous consumers will choose healthier food products empirical results from the ready to eat breakfast cereal rtec market confirm the conceptual analysis that lowering information cost via simplified nutritional labeling increases the healthfulness of consumer choices the healthfulness attribute weighs 28 44 more heavily in consumers decision making with simpler labeling systems on average introducing front of package labeling increased the probability of a consumer choosing a healthy rtec by 3 49 and reduced the probability of choosing an unhealthy rtec by 3 81 calories sugar saturated fat and sodium consumption decrease by 0 31 2 63 6 94 and 1 97 respectively fiber intake increases by 3 24 further results show that less educated and smaller households with less frequent purchases benefit the most from a reduction in information cost overall this article shows the potentially positive role that voluntary more convenient labeling could play in improving market and public health outcomes

fiscal impacts of energy efficiency programmes the example of solid wall insulation investment in the uk programmes supporting the installation of energy efficiency measures typically incur a cost in the form of subsidies as well as lost vat income due to reduced energy consumption those costs are to some extent offset by the tax receipts and other revenue streams generated as a result of the activities promoted under the programme in this paper we analyse the budgetary effects of energy efficiency programmes focusing on the example of solid wall insulation in the uk three distinct subsidy options have been defined and modelled for the purpose of this research including two policies with varying degrees of direct subsidy and a low interest loan scheme our analysis shows that a significant amount of the cost of a scheme funding solid wall insulation would be offset by increased revenues and savings a loan scheme due to the high leverage achieves not only budget neutrality but generates additional revenue for the exchequer

machine replacement and the business cycle lumps and bumps this paper explores investment fluctuations due to discrete changes in a plant s capital stock the resulting aggregate investment dynamics are surprisingly rich reflecting the interaction between a replacement cycle the cross sectional distribution of the age of the capital stock and an aggregate shock using plant level data lumpy investment is procyclical and more likely for older capital further the predicted path of aggregate investment that neglects vintage effects tracks actual aggregate investment reasonably well however ignoring fluctuations in the cross sectional distribution of investment vintages can yield predictable nontrivial errors in forecasting changes in aggregate investment

receptivity to the production of product service systems in the uk construction and manufacturing sectors a comparative analysis abstract trajectories of service innovations emanating from manufacturing sectors have been of particular interest to those wishing to improve resource productivity and promote sustainable development research has focused on product service systems psss which are a category of service innovations deliberately designed to offer superior environmental performance this paper draws on research which explored whether trajectories of pss can be induced on new uk housing developments to satisfy household demand and prevent household waste the research was undertaken with a uk speculative house builder and facilities management service providers from its supplier network qualitative data were collected via interviews and focus groups to enable rich accounts of the range of factors in these firms selection environments which affect receptivity to pss production to be developed these were compared with factors affecting receptivity to pss production identified in a study of uk manufacturers the results show that in contrast to the manufacturing study clear drivers for pss delivery on new housing developments are absent in external selection environments of participating firms and uncertainty associated with the potential of pss concepts to satisfy household demand inhibits development of requisite competence for pss delivery within these thus further research is needed to explore new pss supply arrangements involving a range of household service providers

brand supermarket demand for breakfast cereals and retail competition the berry levinsohn and pakes 1995 market equilibrium model is extended to the supermarket chain level to examine consumer choices and retail competition for thirty seven brands of breakfast cereals in boston estimated taste parameters for product characteristics vary significantly across consumers although consumers are price sensitive with respect to their chosen cereals they exhibit strong brand and supermarket loyalty retail markups increase and marginal costs decrease with grocery market shares attesting to oligopoly power with efficiencies markups decrease with the own price elasticity of demand with corn flakes having the highest markups a detailed picture of consumer response and supermarket competition is provided

saving money vs investing money do energy ratings influence consumer demand for energy efficient goods abstract the article analyses economic barriers leading to the energy efficiency gap in the market for energy using products by observing several million transactions in the uk over two years the empirical exercise estimates aids models for refrigerators washing machines tvs and light bulbs results indicate that market barriers are crucial in the demand for energy efficient options and consumer response to changes in appliance prices total expenditures and energy prices depends on the possibility of behavioural adjustments in consumption in contrast with the induced innovation hypothesis current electricity prices can fail to induce innovation because of their short term impact on disposable income while consumers invest in energy efficiency when expecting electricity prices to rise in the future

efficiency gains within firms under voluntary environmental initiatives this paper focuses on efficiency gains that voluntary environmental initiatives may achieve within the firm current debate concerning the extent and significance of inefficiencies within firms is critically important to the progress of energy and environmental policies several recent lines of inquiry in microeconomics help explain the persistence of inefficiencies within firms in addition two of the most prominent new approaches in the field of business strategy resource based strategy and the capabilities perspective focus on the heterogeneity among firms and the resulting pockets of inefficiency within firms they suggest at least three generic strategies for voluntary environmental initiatives challenging outdated organizational routines creating opportunities for differentiation or complementing firms resource investment trajectories these generic approaches suggest that there is considerable scope for further experimentation with voluntary environmental initiatives

are energy efficiency standards justified abstract this paper develops an analytical framework for comparing the welfare effects of energy efficiency standards and pricing policies for reducing gasoline electricity and nationwide carbon emissions the model is parameterized with us data and includes key externalities in the energy transportation sectors and possible underinvestment in energy efficiency due to misperceptions over energy savings even with large misperceptions the extra welfare gains from complementing efficient pricing policies with energy efficiency standards are zero for reducing gasoline and 5 percent for reducing electricity and when viewed as substitutes these standards forgo 60 percent or more of the potential welfare gains from corresponding pricing policies a combination of energy efficiency and emissions standards is more than three times as costly as carbon pricing when there is no misperception over energy savings and even with large misperceptions combining carbon pricing with gasoline electricity taxes is better than combining it with energy efficiency standards

the rebound effect some empirical evidence from india abstract the present paper looks at the effect of technical efficiency gains on energy use in three sectors in india at varying levels of aggregation high positive rebound implies that efficient technology unless supplemented by appropriate pricing policy will not be successful in containing demand however the main purpose of the paper is to focus on the unique mechanism of rebound that may occur in developing countries with unmet demand

evidence on the role of cash flow for investment abstract recent work in macroeconomics argues that imperfections in capital markets may lead to business cycle fluctuations by propagating relatively modest shocks evidence for such a mechanism also known as the financial accelerator consists largely of firm level studies showing that cash flow is an important predictor of investment but this evidence is often viewed with skepticism because cash flow is also a good indicator of investment opportunities in this paper we develop a framework for estimating the extent to which the predictive power of cash flow can be attributed to its role as a fundamental versus its role in alleviating credit frictions for firms with access to commercial paper and bond markets we find that the perfect capital markets model of investment can fully account for the role of cash flow for firms with only limited access to capital markets as indicated by lack of participation in public debt markets however investment appears to be excessively sensitive to fluctuations in cash flow these results thus clarify the role of cash flow in investment equations and provide support for the existence of a financial accelerator

distribution of energy consumption and the 2000 w capita target this viewpoint discusses the intra and international distribution of energy consumption and their implications for intergenerational equity for global development to be sustainable the inequality of energy consumption must have an upper limit a graphic depiction of energy consumption distributions intra and international shows that today s inequalities are large and it is argued that we may have already reached or perhaps even surpassed the sustainability limit of energy consumption inequality

optimal investment with lumpy costs abstract in this paper we analyze a continuous time model of investment with uncertainty irreversibility and a broad class of lumpy adjustment costs we show that the two components of the optimal investment strategy the investment trigger and the investment increment can be found sequentially and that the optimal investment increment maximizes a closed form function solving the model numerically we find that adding a relatively small amount of variable adjustment costs often leads firms to invest in much smaller increments we derive a measure of user cost that incorporates lumpy investment and use it to show that as firms invest in bigger increments the investment trigger increases as well

demand pull government policies to support product service system activity the case of energy service companies escos in the uk product service systems psss constitute a family of service based business models designed to satisfy our societal needs in an economically and environmentally sustainable manner to date however pss application has remained niche due to a variety of critical barriers this paper explores how demand pull national government policies could support pss activity by addressing these barriers and cultivating market demand lessons are drawn from a case study of how regulatory economic incentive informative and procurement policies have supported energy service company esco activity in the uk a sub set of the pss family focused on energy service provision subsequently five policy recommendations are presented to support pss activity 1 balancing economic incentives and regulatory disincentives 2 promoting indirect policy support 3 redesigning existing market structures 4 promoting locally led pss activity and 5 creating stable policy frameworks the paper warns however that national government policy cannot easily address all pss barriers such as customer preferences international developments technological progress and inherent business model weaknesses pointing to the need for other complementary solutions furthermore other governance actors beside national government could also implement pss supporting policies

a review of demand side management policy in the uk abstract demand side management dsm refers to actions undertaken on the demand side of energy metres a broad definition of dsm is proposed to include current policy objectives for emissions reduction energy security and affordability and encompasses energy efficiency demand response and on site back up generation and storage the paper reviews the concept of dsm outlines the historical impacts of dsm globally since the energy crises of the 1970s analyses uk dsm policy and examines the influence of eu directives on uk dsm policy as the country is currently deciding on how to include the demand side in its electricity market reform proposals and wider energy policy much of the focus of previous research has been on dsm technological trials and modelling studies rather than dsm policy and the paper contributes to filling this gap policy recommendations for the uk context are discussed and it is clear that the success of dsm policies is determined primarily by regulatory support and utility financial incentives it is important that policy clarity is provided and that current and new policies do not overlap

the energy efficiency gap what does it mean abstract as renewed attention has been given by policy makers to energy conservation issues it has frequently been asserted that an energy efficiency gap exists between actual and optimal energy use the critical questions is how to define the optimal level of energy efficiency this paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question by identifying the major conceptual issues that determine the set of feasible answers we identify five separate and distinct notions of optimality the economists economic potential the technologists economic potential hypothetical potential the narrow social optimum and the true social optimum each of these has associated with it a corresponding definition of the energy efficiency gap our analysis demonstrates that necessary preconditions for identifying the right measure of the energy efficiency gap include understanding and disentangling market failure and non market failure explanations for the gradual diffusion of energy efficient technologies

energy milk price transmission at the product brand level this article estimates the pass through rates between diesel fuel and retail milk prices at the product brand level using a random coefficient logit demand model and taking the direct and indirect impacts of energy prices this research identifies changes in pass through rates before and after the great recession in 2008 empirical results show that diesel prices significantly impacted the retail prices of milk products and are an important determinant of food price inflation pass through rates are estimated to range from 0 16 to approximately 0 60 through 2008 with an average of 0 22 for the whole period statistical tests indicate that pass through rates before june 2008 were significantly higher than after june 2008 when they dropped significantly to 0 04 to 0 17 interestingly private label brands have the lowest pass through rates implying that compared to manufacturer brands private label prices are more insulated from diesel price shocks

quantifying the global and distributional aspects of american household carbon footprint abstract analysis of household consumption and its environmental impact remains one of the most important topics in sustainability research nevertheless much past and recent work has focused on domestic national averages neglecting both the growing importance of international trade on household carbon footprint and the variation between households of different income levels and demographics using consumer expenditure surveys and multi country life cycle assessment techniques this paper analyzes the global and distributional aspects of american household carbon footprint we find that due to recently increased international trade 30 of total us household co 2 impact in 2004 occurred outside the us further households vary considerably in their co 2 responsibilities at least a factor of ten difference exists between low and high impact households with total household income and expenditure being the best predictors of both domestic and international portions of the total co 2 impact the global location of emissions which cannot be calculated using standard input output analysis and the variation of household impacts with income have important ramifications for polices designed to lower consumer impacts on climate change such as carbon taxes the effectiveness and fairness of such policies hinges on a proper understanding of how income distributions rebound effects and international trade affect them

socio ecological regime transitions in austria and the united kingdom we employ the concepts of socio ecological regime and regime transition to better understand the biophysical causes and consequences of industrialization for two case studies the united kingdom and austria we describe two steps in a major transition from an agrarian to an industrial socio ecological regime and the resulting consequences for energy use land use and labour organization in a first step the coal based industrial regime co existed with an agricultural sector remaining within the bounds of the old regime in a second step the oil electricity based industrial regime agriculture was integrated into the new pattern and the socio ecological transition had been completed industrialization offers an answer to the input and growth related sustainability problems of the agrarian regime but creates new sustainability problems of a larger scale while today s industrial societies are stabilizing their resource use albeit at an unsustainable level large parts of the global society are in midst of the old industrial transition this poses severe problems for global sustainability

from demand side management dsm to energy efficiency services a finnish case study abstract energy conservation is expected to contribute significantly to climate change mitigation and energy security traditionally energy companies have had strong role in providing demand side management dsm measures however after energy market liberalization in europe energy companies dsm activities declined in response the eu issued directive 2006 32 ec on energy end use efficiency and energy services esd to motivate energy companies to promote energy efficiency and conservation closely followed by directive 2012 27 eu on energy efficiency eed requiring the setting up energy efficiency obligation schemes despite strong political and economic motivation energy companies struggle to develop energy efficiency services in liberalised energy markets due to conflicting institutional demands which arise from contradicting policy requirements and customer relations the main challenges in developing new innovative energy efficiency services evidenced by an in depth case study were 1 the unbundling of energy company operations which makes it difficult to develop services when the contribution of several business units is required and 2 the distrust among energy end users which renders the business logic of energy saving contract models self contradictory on the basis of the research avenues out of these dilemmas are suggested

what do we know about investment under uncertainty recent theoretical developments relating to investment under uncertainty have highlighted the importance of irreversibility for the timing of investment expenditures and their expected returns this has subsequently stimulated a growing empirical literature which examines uncertainty and threshold effects on investment behaviour this paper presents a review of this literature a variety of methods have been used to investigate the empirical implication of irreversibility in investment the majority focusing on the relationship between investment flows and proxy measures of uncertainty a general conclusion is that increased uncertainty at both aggregate and disaggregate levels leads to lower investment rates this suggests that there is an irreversibility effect under which greater uncertainty raises the value of the call option to delay a commitment to investment this effect appears to dominate any positive impact on investment arising from the fact that greater uncertability under certain circumstances increases the marginal profitability of capital the methods used raise a number of issues which call into question the reliability of the findings and these are addressed in the paper however if such irreversibility effects are present then their omission from traditional investment models casts doubt on the efficacy of such specifications jel classification d81 d92 e22

innovation enabling policy and regime transformation towards increased energy efficiency the case of the circulator pump industry in europe abstract when new energy efficient products are struggling with their commercialisation and diffusion into widespread applications you would typically expect policy makers and green lead users to guide the way this paper examines the case of the hot water circulator pump industry in europe where parts of the industry envisioned and worked for a voluntary energy label bringing technological innovation new business and energy savings of approx 85 for each new circulator pump the case study explores the complexities of innovation processes where technology market actors and policy co evolve over time to transform an existing socio technical regime the paper highlights the importance of policies to reduce barriers towards innovation and energy efficiency and shows that it is not always policy makers that establish the crucial policies that change the innovation dynamics for the benefit of the environment and the industry

energy management practices in swedish energy intensive industries previous studies point out a large untapped potential for energy efficiency in industry through the adoption of energy management practices the aim of this paper is to describe and analyze energ

the co evolutionary relationship between energy service companies and the uk energy system implications for a low carbon transition abstract the energy service company esco business model is designed to reward businesses by satisfying consumers energy needs at less cost and with fewer carbon emissions via energy demand management and or sustainable supply measures in contrast the revenue of the incumbent energy utility company euco model is coupled with the sale of units of energy which are predominantly sourced from fossil fuels the latter is currently dominant in the uk this paper addresses two questions first why has the esco model traditionally been confined to niche applications second what role is the esco model likely to play in the transition to a low carbon uk energy system to answer these the paper examines the core characteristics of the esco model relative to the euco model the paper then examines how escos have co evolved with the various dimensions of the energy system i e ecosystems institutions user practices technologies and business models to provide insight into how escos might help to shape the future uk energy system we suggest that institutional and technological changes within the uk energy system could result in a more favourable selection environment for escos consequently enabling the esco model to proliferate at the expense of the euco model

labeling energy cost on light bulbs lowers implicit discount rates lighting accounts for nearly 20 of overall u s electricity consumption and 18 of u s residential electricity consumption a transition to alternative energy efficient technologies could reduce this energy consumption considerably to quantify the influence of factors that drive consumer choices for light bulbs we conducted a choice based conjoint field experiment with 183 participants we estimated discrete choice models from the data and found that politically liberal consumers have a stronger preference for compact fluorescent lighting technology and for low energy consumption greater willingness to pay for lower energy consumption and longer life was observed in conditions where estimated operating cost information was provided providing estimated annual cost information to consumers reduced their implicit discount rate by a factor of five lowering barriers to adoption of energy efficient alternatives with higher up front costs however even with cost information provided consumers continued to use implicit discount rates of around 100 which is larger than that experienced for other energy technologies