energy efficiency investments in the context of split incentives among french households the residential sector offers considerable potential for reducing energy use and greenhouse gas ghg emissions particularly through energy efficient renovations the objective of this study is twofold first i aim to provide initial empirical evidence of the extent to which split incentives between landlords and tenants may lead to underinvestment second i investigate the influence of tax credits and energy burdens on energy efficiency expenditures given the complexity of studying the decision to invest in energy saving renovations i use a bivariate tobit model to compare decisions about energy efficient works and repair works even when the renovation expenditures seem quite similar the analysis shows that tenants are doubly penalized they have high energy expenditures due to energy inefficient building characteristics and because they are poorer than homeowners they are unable to invest in energy saving systems the results also confirm that tax credits are ineffective in the split incentives context in terms of public policy the government should focus on low income tenants and mandatory measures such as minimum standards seem appropriate financial support from a third party financer also might be a solution

modeling technology adoptions for sustainable development under increasing returns uncertainty and heterogeneous agents abstract this paper presents a stylized model of technology adoptions for sustainable development under the three potentially most important stylized facts increasing returns to adoption uncertainty and heterogeneous agents following diverse technology development and adoption strategies the stylized model deals with three technologies and two heterogeneous agents a risk taking one and a risk averse one interactions between the two agents include trade in resources and goods and technological spillover free riding and technology trade with the two heterogeneous agents we run optimizations to minimize their aggregated costs in order to find out what rational behaviors are under different assumptions if the two agents are somehow cooperative by considering uncertain carbon taxes the model also addresses environmental issues as potential driving forces for technology adoptions

barriers to energy efficiency a comparison across the german commercial and services sector abstract based on a large sample for the german commercial and services sector this paper econometrically assesses the relevance of various types of barriers to energy efficiency at the sectoral level and across fifteen sub sectors the results at the level of entire sectors suggest that the lack of information about energy consumption patterns and about energy efficiency measures lack of staff time priority setting within organizations and in particular the investor user dilemma are all relevant barriers allowing for sector specific differences in the relevance of these individual barriers yields a more heterogeneous picture the numbers and types of relevant barriers vary across sub sectors and the majority of sub sectors are subject to relatively few barriers the statistically most significant barriers are found for the sub sector of public administrations these findings are robust independent of whether the definition of an organization s energy efficiency performance includes only measures that have actually been realized or also those that are being planned for planned projects however organizations appear to underestimate internal priority setting as a barrier to energy efficiency

appropriate business strategy for leaders and laggards we develop a series of hypotheses that predict that the appropriateness of different business strategies is conditional on the firm s relative performance or distance to the industry frontier we use data on three 2 digit high tech manufacturing industries in the united states over the period 1972 1999 and apply semi parametric quantile regressions to investigate the contribution of firm behavior to market value at various points of the conditional distribution of tobin s q among our results we observe that innovative activity measured in terms of r d expenditure or patents has a strong positive association with market value at the upper quantiles corresponding to the leader firms whereas the innovative efforts of laggard firms are valued significantly less laggard firms we suggest should instead achieve productivity growth through efficient exploitation of existing technologies and imitation of industry leaders employment growth in leader firms is encouraged whereas growth of backward firms is not as well received on the stock market

does the energy efficiency paradox exist technological progress and uncertainty we explain why firms may choose not to undertake investments inenergy saving technologies that appear profitable from a net presentvalue perspective as future technological advances are inherentlyuncertain and investments in new technology are at least partly irreversible it may pay to postpone investments in energy savingand wait for the arrival of improved varieties this insight casts doubton the existence of so called low hanging fruits in energy saving although we do not wish to deny that organisational failures may alsobe important failure to appreciate the underlying stochasticity oftechnological progress may obscure the insight that there is value inwaiting and costs involved in terminating the option to invest theappetite for low hanging fruits will be less when these costs areincorporated in the analysis we demonstrate that the effect of thearrival rate of new technologies on the adoption lag for a rational firmis ambiguous the same holds for the effect of the expected jump inefficiency of new technologies government policies aimed at enhancingthe adoption of new technologies through stimulation of r d maytherefore be counterproductive

the experience curve option value and the energy paradox abstract this paper develops a model to explain the energy paradox the inclination of households and firms to require very high internal rates of return in order to make energy saving investments the model abstracts from many features of such investments to focus on their irreversibility the uncertainty of their future payoff streams and the investor s anticipation of future technological advance in this setting the decision to invest in energy saving technology can be delayed providing option value in addition delay allows the potential investor to cash in on future experience curve effects with the passage of time firms gain practical knowledge in producing and installing the energy saving technology enabling them to reduce the technology s up front cost per unit of energy saved we incorporate these fundamentals into a stochastic model where the investment s discounted benefits follow geometric brownian motion to demonstrate the model s capabilities we generate simulation results for photovoltaic systems that highlight the experience curve effect as a fundamental reason why households and firms delay making energy saving investments until internal rates of return exceed values of 50 and higher consistent with observations in the economics literature we also explore altruistic motivations for energy conservation and the model s implications for both additionality and the design of energy conservation policy

the role of the discount rates in energy systems optimisation models abstract the selection of the social discount rate and the consideration of hurdle rates in energy systems optimisation models affect the creation of sound and comprehensive scenarios useful for energy modellers due to the lack of studies about the use of different discounting options in energy optimisation models the goal of this paper is to fill that gap by establishing the foundations for a debate among energy modellers policy makers and stakeholders in this regard so firstly we introduced the concept of discount rates both social and technology specific including a thorough literature review concerning figures scopes and approaches secondly two models etsap tiam and times norway were used to assess the behaviour of the energy systems at different regionalisation levels europe and norway respectively thirdly we analysed the evolution of the electricity production mixes and system costs for both models and considering several values for the discount rates finally results showed that the energy system is strongly affected by changes in the social discount rate the lower the social discount rate is the higher the renewable contribution the social discounting exerts influence on capital intensive investments so it is quite important to look at the energy carriers pathways fossil renewable transition this is what happens in the case of etsap tiam for europe reversely in the case of times norway as the electricity system is almost 100 renewable it is important to take into account the hurdle rates of the technologies to enrich the competition by including their particular risks and barriers in summary we recommend using a value not higher than 4 5 for the social discount rate for the european countries as well as to include an exhaustive portfolio of hurdle rates for all the technologies included in the energy optimisation model

are environmental fiscal incentives effective in inducing energy saving renovations an econometric evaluation of the french energy tax credit abstract fiscal incentives have been introduced to encourage households in many countries to undertake energy saving renovations this paper assesses the impact of an energy tax credit on i renovation rate and ii renovation expenditures using french data we exploit a sharp discontinuity corresponding to the introduction of the french tax credit in 2005 to identify the policy s effects results indicate that the tax credit has little effect on the decision to renovate increasing renovations by 1 09 ceteris paribus we find that the presence of free riding reduces the actual effect of fiscal measures however this fiscal policy does lead to an increase in renovation expenditures by 21 76 all things being equal this suggests that the energy tax credit induces households who are already determined to renovate to perform more substantial energy saving renovations we conduct a robustness check using the matching method which confirms our results

the aim end use model and its application to forecast japanese carbon dioxide emissions abstract the asian pacific integrated model aim has been developed for predicting greenhouse gas emissions and evaluating policy measures to reduce them two socioeconomic scenarios were assumed and co 2 emissions were predicted based on these scenarios and policy intervention assumptions it is found that mitigating co 2 emissions by 6 to the 1990 level is possible without scaling back productive activities or living standards in japan however this cannot be achieved by relying on the market mechanism alone our analysis shows that it is indispensable to introduce new policies and measures such as a carbon tax and subsidies

the energy efficiency paradox revisited through a partial observability approach the present paper examines the energy efficiency paradox demonstrated in greek manufacturing firms through a partial observability approach the data set used has resulted from a survey carried out among 161 energy saving technology firm adopters maximum likelihood estimates that arise from an incidental truncation model reveal that the adoption of the energy saving technologies is indeed strongly correlated to the returns of assets that are required in order to undertake the corresponding investments the source of the energy efficiency paradox lies within a wide range of factors policy schemes that aim to increase the adoption rate of energy saving technologies within the field of manufacturing are significantly affected by differences in the size of firms finally mixed policies seem to be more effective than policies that are only capital subsidy or regulation oriented

beyond case studies barriers to energy efficiency in commerce and the services sector to assess the empirical relevance of various barriers to the diffusion of energy efficient measures we conduct econometric analyses for 19 sub sectors in the german commercial and services sectors results from estimating a separate logit model for each sub sector suggest that the most important barriers are the investor user dilemma and the lack of information about energy consumption patterns typically multiple types of barriers are found to be statistically significant but they vary considerably across sub sectors finally we discuss policy implications for the most relevant barriers

outsourcing and firm performance a comparative study of swiss and greek firms this article aims at analyzing i the factors determining the firms propensity to outsource various processes production of intermediate products production of final products r d activities ict activities and ii the impact of outsourcing on firms innovation performance as well as labor productivity the integral investigation of the determining factors as well as the impact of outsourcing on innovation and productivity based on the same data in a comparative setting switzerland versus greece are important new elements and contributions of this study to the existing empirical literature it has been concluded that in both countries more innovative firms r d were stronger inclined to outsourcing activities than less innovative ones whereas on the contrary the educational level of employees and the labor cost showed no effect on outsourcing in both countries also the intensity of ict use and organizational aspects especially those related to the formal structure of workplace organization were relevant for the swiss firms but not for the greek firms with respect to the impact of outsourcing on performance it has been concluded that it tends to enhance innovation particularly process innovation but only weakly productivity at least directly copyright 2013 the author 2012 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

normal markets market imperfections and energy efficiency abstract the conventional distinction between economic and engineering approaches to energy analysis obscures key methodological issues concerning the measurement of the costs and benefits of policies to promote the adoption of energy efficient technologies the engineering approach is in fact based upon firm economic foundations the principle of lifecycle cost minimization that arises directly from the theory of rational investment thus evidence that so called market barriers impede the adoption of cost effective energy efficient technologies implies the existence of market failures as defined in the context of microeconomic theory problems of imperfect information and bounded rationality on the part of consumers for example may lead real world outcomes to deviate from the dictates of efficient resource allocation a widely held contrary view that the engineering view lacks economic justification is based on the fallacy that markets are normally efficient

incentives for investment in energy efficiency an econometric evaluation and policy implications technical studies suggest that there exist many opportunities to improve energy efficiency and that a substantial proportion is profitable by current business standards this study deals with the question why so many of these profitable opportunities are not used reasons for not implementing profitable opportunities are idetified and their effect is estimated on the basis ofa survey among dutch firms designed specifically for this study the reasons that prevail indicate what policy measures may accompany energy taxes in the pursuit of energy efficiency improvement in addition energy efficiency elasticities are estimated as well as the factors that determine the elasticities these too indicate opportunities for government policy if it wants to improve the effectiveness of energy taxes

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

implementation of energy efficiency projects by dutch industry as potentials for energy savings are huge industry can provide a major contribution to energy savings goals this paper focuses on the energy savings realized under the dutch voluntary agreements in the period 2001 2011 participants in these schemes are obliged to plan and implement all measures with a payback period of less than 5 years this paper shows how many of these projects have been implemented and how much savings they generate our findings show that large differences exist in the realized savings between individual companies there is however no significant difference in savings observed between companies that participate in the emission trading system ets and companies that do not although it is impossible to disentangle the drivers behind the implementation of these projects the amount of savings suggest that at least part of them was implemented because of different energy policy instruments

greasing the wheels of international commerce how services facilitate firms international sourcing we use unique plant level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad to guide our empirical analysis we develop a monopolistic competition model of the materials sourcing decisions of heterogeneous firms the model generates predictions about how the intensity of international sourcing of materials depends on a firm s productivity and the availability of local services these predictions are supported by the data we find evidence that more productive manufacturing firms tend to have a higher ratio of imported materials to sales in addition we find evidence that services grease the wheels of international commerce a greater availability of services across regions industries and time increases a firm s foreign sourcing of materials relative to sales interestingly this positive impact of local service availability on imports especially applies to stand alone firms that unlike multinationals are less likely to rely on imported or internally provided services

sourcing by design product complexity and the supply chain this paper focuses on the connection between product complexity and vertical integration using original empirical evidence from the auto industry a rich literature has addressed the choice between internal production and external sourcing of components in the auto industry more recent literature has developed the concept of product architecture as another choice variable that may be one of the important contributors to product complexity in this paper we connect these two important decisions and study them jointly we use the property rights approach to argue that complexity in product design and vertical integration of production are complements that in house production is more attractive when product complexity is high as firms seek to capture the benefits of their investment in the skills needed to coordinate development of complex designs we test this hypothesis with a simultaneous equations model applied to data from the luxury performance segment of the auto industry we find a significant and positive relationship between product complexity and vertical integration this has implications for optimal incentive structures within firms as well as for interpreting firm performance

energy conservation investment do consumers discount the future correctly we argue that the apparently high discount rates attributed to investors making energy conservation investments are not irrational or the result of some market failure rather they may result from an investor recognizing that many conservation investments entail substantial sunk costs in the presence of these costs and uncertainty over future conservation savings consumers should use a higher hurdle rate for investment than if there were no uncertainty simulations suggest that the hurdle rate should be about four times greater than the standard rate an implication of our model is that tax subsidies for the purchase of conservation capital are likely to be ineffective we discuss alternative policy approaches which are more likely to increase energy efficient investment namely mandatory efficiency standards and energy taxes

what factors determine the outsourcing intensity a dynamic panel data approach for manufacturing industries the present article investigates the determinants of outsourcing production using a panel of 93 spanish manufacturing industries for the period 1993 to 2002 outsourcing is measured as production tasks which are contracting out to external suppliers a more direct and suitable indicator after controlling for unobserved heterogeneity and simultaneity our results show a high persistence of the outsourcing intensity moreover outsourcing of production is positively related to unit labour costs skills requirements national ownership and orientation to international markets we also find evidence for a negative link between the outsourcing intensity and the share of small firms

barriers to industrial energy efficiency investments in greece abstract this paper sets out to investigate the main determinants of industrial decision making process with respect to energy efficiency investments based on a survey among greek industries in the empirical analysis probit models are employed the results support that an energy saving campaign should regard industries as subgroups with different needs and different managerial aspects the importance of qualified employees is also established from this survey an energy conservation framework would be more effective if the diffusion of information with regard to industrial energy saving investments is based on investment in human capital

where are the industrial technologies in energy economy models an innovative cge approach for steel production in germany top down computable general equilibrium cge models are used extensively for analysis of energy and climate policies energy intensive industries are usually represented in top down economic models as abstract economic production functions commonly of the constant elasticity of substitution ces or translog functional form this study explores methods for improving the realism of energy intensive industries in top down economic models we replace a ces production function with a set of specific technologies and provide a comparison between the traditional production function approach in cge models and an approach with separate technologies for making iron and steel in particular we investigate the response of the iron and steel sector to a set of co2 price scenarios our technology based integrated approach permits a choice between several technologies for producing iron and steel and allows for shifts in technology characteristics over time towards best practice innovative technologies in addition the general equilibrium framework allows us to analyze interactions between production sectors for example between electricity generation and iron and steel production investigate simultaneous economy wide reactions and capture the main driving forces of greenhouse gas emissions reductions under a climate policy we conclude that technology specific effects are crucial for the economic assessment of climate policies in particular the effects relating to process shifts and fuel input structure

endogenous technological change and emissions the case of the german steel industry abstract the paper starts from the observation that innovation and technical progress are only portrayed superficially in the predominant environmental economic top down models and that the assumption of perfect factor substitution does not correctly mirror actual production conditions in many energy intensive production sectors bottom up models on the other hand neglect macroeconomic interdependencies between the modelled sector and the general economy this paper presents a new modelling approach in an integrated bottom up top down approach based on the example of crude steel production in germany it is demonstrated how technological progress can be portrayed as process related and policy induced and how the technology choice between limitational processes can be explicitly modelled and implemented in the econometric input output model panta rhei the new modelling approach presented permits a process specific analysis of the impacts of changed frame conditions the effects of which on the choice of technology on the one hand and the technological progress on the other can be described endogenous to the model these features are demonstrated in a co2 tax simulation results show that policy induced technological change is besides a switch in production processes the major source of co2 reduction for the steel sector

the efficiency paradox bureaucratic and organizational barriers to profitable energy saving investments abstract the paradox of why profitable energy saving investments are not undertaken continues to provoke debate the underlying phenomenon might be called the efficiency paradox because it represents a case in which business firms which are often presumed or taken axiomatically to be economically efficient make decisions that do not maximize profits new data from one of the us environmental protection agency s voluntary pollution prevention programs enables this paradox to be explored statistically the data show that both the level and variation in returns to lighting upgrade investments cannot be explained by standard economic models substantial gains in energy efficiency can be achieved without sacrificing profitability both economic and organizational factors account for some of the variation in observed returns to these investments but the results suggest a need for improved and more comprehensive theories of the investment behavior of firms and other organizations

barriers to improvements in energy efficiency the growing recognition of the potential energy savings available through improvements in energy efficiency has sparked an increased interest in the actors involved in implementing these improvements and the barriers that they can encounter this paper identifies these actors and creates a topology for the various barriers that hinder their efforts to achieve better energy efficiencies at the very lowest level of the energy consumer to the very highest level of the global financial agencies the analysis concludes that four essential factors will help facilitate the dissemination of energy efficiency improvements relying on combinations of measures for overcoming each barrier to energy efficiency using combinations of measures at the strategic level employing policy assisted market oriented mechanisms and promoting technological innovation as a means for achieving improved energy efficiency

energy return on energy invested eroi oil prices and energy transitions very little work has been done so far to model test and understand the relationship between oil prices and eroi over time this paper investigates whether a declining eroi is associated with an increasing oil price and speculates on the implications of these results on oil policy a model of the relationship between eroi and oil market prices was developed using basic economic and physical assumptions and non linear least squares regression models to correlate oil production price with eroi using available data from 1954 1996 the model accurately reflects historical oil prices 1954 1996 and it correlates well with historical oil prices 1997 2010 if a linear extrapolation of eroi decline is assumed as eroi declines below 10 highly non linear oil price movements are observed increasing physical oil scarcity is already providing market signals that would stimulate a transition away from oil toward alternative energy sources but price signals of physical oil scarcity are not sufficient to guarantee smooth transitions to alternative fuel sources especially when there is insufficient oil extraction technology development a declining mark up ratio a non linear eroi cost of production relationship and a non linear eroi price relationship

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

a plant specific bottom up approach for assessing the cost effective energy conservation potential and its ability to compensate rising energy related costs in the german iron and steel industry abstract germany produces more steel than any other european country 42 7 mt steel in 2012 the steel production accounts for 22 of germany s final industrial energy consumption we assessed the potential of 32 identified energy conservation measures by deriving fuel electricity and co2 conservation cost curves we developed a methodology which respects the current efficiency of individual plants and two different system boundaries a process boundary for benchmarking measures and a facility boundary for calculating the total energy conservation potential with moderate electricity and carbon price developments for the investigation period 2013 2035 the cost effective conservation potentials are estimated to be 11 7 for fuel 2 2 for electricity and 12 2 for fuel and process related co2 emissions compared to the industry s final energy use and co2 emissions in 2012 for the sensitivity analysis we varied electricity and carbon prices and our results showed that adopting cost effective energy conservation measures can compensate for rising energy prices but the extent differs between the production routes while the eaf route could compensate up to 50 higher electricity prices the options for the bf bof route to reduce the fossil fuel consumption are limited thus the energy related production costs of the bf bof route increased in average by 6 13 between 2013 and 2035

forecasting global developments in the basic chemical industry for environmental policy analysis the chemical sector is the largest industrial energy user but detailed analysis of its energy use developments lags behind other energy intensive sectors a cost driven forecasting model for basic chemicals production is developed accounting for regional production costs demand growth and stock turnover the model determines the global production capacity placement implementation of energy efficient best practice technology bpt and global carbon dioxide co2 emissions for the period 2010 2030 subsequently the effects of energy and climate policies on these parameters are quantified about 60 of new basic chemical production capacity is projected to be placed in non oecd regions by 2030 due to low energy prices while global production increases by 80 between 2010 and 2030 the oecd s production capacity share decreases from 40 to 20 and global emissions increase by 50 energy pricing and climate policies are found to reduce 2030 co2 emissions by 5 15 relative to the baseline developments by increasing bpt implementation maximum bpt implementation results in a 25 reduction further emission reductions require measures beyond energy efficient technologies the model is useful to estimate general trends related to basic chemicals production but improved data from the chemical sector is required to expand the analysis to additional technologies and chemicals

does being r d intensive still discourage outsourcing evidence from dutch manufacturing being r d intensive has traditionally been seen as an impediment to outsourcing this study confirms that empirically this was the case for a set of manufacturing industries in the netherlands in the early 1990s but also shows that r d intensity became a positive predictor for changes in outsourcing levels over the 1990s suggesting firms in r d intensive industries have increasingly started to rely on partnership relations with outside suppliers this confirms the need to move the analysis from scale opportunism and appropriation concerns to a relational perspective when studying outsourcing in r d intensive industries

macroeconomic effects of efficiency policies for energy intensive industries the case of the uk climate change agreements 2000 2010 abstract this paper reports a study modeling the uk climate change agreements ccas and related energy efficiency policies for energy intensive industrial sectors bottom up estimates of the effects of these policies are introduced into the energy demand equations of a top down dynamic econometric model of the uk economy with fifty industrial sectors mdm e3 this allowed estimation of the effects of the reduced energy use for the outputs from the sectors i e the reductions in unit costs of the energy intensive industries on the demand for their outputs both in the uk and in the export markets the model is solved as a counterfactual 2000 2005 and as a projection 2005 2010 in a series of scenarios to allow estimation of the effects of the policies on inflation and growth as well as on overall energy demand and co 2 emissions the system wide final energy reductions is estimated to be 4 2 mtoe or 2 6 of total final demand for energy by 2010 including a rebound effect of 19 with negligible effects on inflation and a slight increase in economic growth through improved international competitiveness

evolution of erois of electricity until 2050 estimation and implications on prices abstract the eroi for energy returned on invested of an energy technology measures its ability to provide energy efficiently previous studies draw a link between the affluence of a society and the eroi of its energy system and show that erois of renewables are lower than those of fossil fuels logically concerns have been expressed that system wide eroi may decrease during a renewable energy transition first i explain theoretically that the erois of renewables themselves could then decrease as energy efficient fossil fuels would be replaced by less energy efficient renewables in the supply chain then using the multi regional input output model themis i estimate the evolution of erois and prices of electric technologies from 2010 to 2050 for different scenarios global eroi of electricity is predicted to go from 12 in 2010 to 11 in 2050 in a business as usual scenario but down to 6 in a 100 renewable one finally i study the economic implication of a declining eroi an inverse relation between eroi and price is suggested empirically even though theory shows that both quantities may move in the same direction

services outsourcing and innovation an empirical investigation we provide a comprehensive empirical analysis of the links between international services outsourcing domestic outsourcing profits and innovation using plant level data we find a positive effect of international outsourcing of services on innovative activity at the plant level such a positive effect can also be observed for domestic outsourcing of services but the magnitude is smaller this makes intuitive sense as international outsourcing allows more scope for exploiting international factor price differentials therefore giving the establishment higher profits and more scope to restructure production activities towards innovation we also find that international outsourcing has a positive effect on profitability as predicted by theory while this is not true for domestic sourcing the results are robust to various specifications and an instrumental variables analysis

how do different drivers of r d investment in foreign locations affect domestic firm performance an analysis based on swiss panel micro data the aim of this article is to investigate the differences between specific motives of rd 2817 companies shows first that factors related to firm specific knowledge oriented advantages are more important for explaining the likelihood of foreign r d activities than factors reflecting disadvantages related to home location second knowledge oriented motives of foreign r d positively influence the innovation performance of domestic firms whereas market and resource oriented strategies have a positive impact on labor productivity copyright 2011 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

evaluation of the impact of environmental public policy measures on energy consumption and greenhouse gas emissions in the french residential sector a cut in energy consumption by 2050 to reach 50 kwhpe m2 year and reduce ghg emissions by 75 are important objectives of environmental policy in france the residential sector represents a significant potential source of energy savings in this paper our main objective is to construct a simulation model and to evaluate the impact of environmental public policy measures we model energy consumption and ghg emissions the decision to invest in energy saving renovations and the dynamics of the housing stock particular attention is paid to household investment decisions regarding home renovation to generate the dynamics and the structure of the housing stock through 2050 we introduce socioeconomic variables that alter the number of renovations and new constructions this study has three major outputs first we estimate the energy consumption and ghg emissions of the residential sector in france through 2050 second we study the impact of environmental public policy measures lastly we propose different means to reach the objectives the results show that while current policies are effective they are not sufficient to reach the objectives

managerial incentives and environmental compliance abstract this paper uses a principal agent model to analyze the role of monetary incentives to implement corporate environmental policy the model assumes that the agent has to split a limited amount of effort between two tasks profit enhancement and environmental risk reduction we find that when the agent s effort constraint is not binding wages should increase with performance in each task moreover the sharpness of the optimal monetary incentives for a given task should depend positively on the principal s eagerness to influence performance on this task and on the accuracy of the monitoring technology when the agent s effort constraint is binding however the necessity for the principal to provide insurance to the agent may make it inefficient to link managerial effort expended on environmental risk reduction to the corporate compensation system

modeling of industrial energy consumption an introduction and context industrial energy accounts for roughly one third of total global energy consumption and is expected to continue to use a similar share in the foreseeable future however this is one of the hardest end uses to analyze model and forecast the reasons for modeling industrial energy consumption are as varied as the ways in which energy is used in production processes this has led to the application of a broad set of emperical tools from several different disciplines in this article we provide an introduction and context for a compendium or survey of the methods used in this area this special issue of energy economics is designed to provide both newcomers and accomplished researchers with an overview of the current state of development in the are of industrial energy modeling

more caution is needed when using life cycle assessment to determine energy return on investment eroi abstract cumulative energy demand ced estimates from life cycle assessments lcas are increasingly used to determine energy return on investment eroi but the difference in indicators can lead to a misclassification of energy flows in the assessment the core idea of eroi is to measure the relation of energy diverted from society to make energy available to society ced on the other hand includes forms of energy that are not appropriated by society such as fugitive methane emissions from oil wells as well as losses of heating value of coal during transport and storage such energy forms should be excluded from eroi failure to do so leads to results that are inconsistent with the intention of eroi and potentially misleading we demonstrate how this problem is at least partially rectifiable by adopting consistent energy accounting but also note that among the energy flows not appropriated by society occurring in ced not all flows can easily be removed further we point to inconsistencies in heating value assumptions in a widely used database that have misled analysts finally we argue that the differential weighting of primary energy forms in published ced based eroi work is unsubstantiated and should be reconsidered

sustainable energy systems and company performance does the implementation of sustainable energy systems improve companies financial performance abstract the main aim of this paper is to analyse whether the adoption of sustainable energy systems improves corporate financial performance to this end we obtained data from a sample of 574 multinational companies from 36 countries in the 2008 2013 period on this data we implement a dynamic system panel data method our findings show that the adoption of sustainable energy systems allows firms to improve their short term corporate financial performance while not leading them to reduce their corporate financial performance in the long term specifically our results indicate that an increase in energy efficiency and the use of renewable energy sources do not significantly affect corporate financial performance neither does the integration of energy efficiency systems and renewable energy sources have any significant influence on corporate financial performance while the level of implementation of sustainable energy management systems has a significant effect on short term but not long term corporate financial performance furthermore other control variables such as research and development expenditure and year are also relevant in explaining firms financial performance the adoption of sustainable energy systems helps to improve corporate financial performance in the short term but has no affect in the long term this might be because the monitoring of energy efficiency using key performance indicators allows firms to detect and correct failures in the production process and hence improve short term financial performance however this measure does not generate competitive advantages for firms and therefore has no effect on long term corporate financial performance from a scientific perspective of energy this paper contributes to the literature by providing a detailed explanation of how the adoption of sustainable energy systems proposed by peura 2013 influences corporate financial performance on the basis of new empirical evidence these explanations provide a strong rationale for improving the efficient use of energy and harvesting low hanging fruits in the short term from a managerial perspective policymakers should encourage firms to align sustainable energy systems with their core business strategy by developing green technologies that allow them to acquire rare and valuable capabilities and abilities which generate competitive advantage and therefore allow firms to increase their long term corporate financial performance

analysis of co2 emissions reduction potential in secondary production and semi fabrication of non ferrous metals industrial sector growth in developing countries requires the provision of alternatives to guarantee sustainable development improving energy efficiency and fuel switching are two measures to reduce co2 emissions in the industrial sector with natural gas and low carbon electricity as the most feasible options in the short term in this work a linear programming optimization model has been developed to study the potential of energy efficiency improvement and fuel substitution for co2 emissions reduction at national level in the non ferrous metals industry the energy resource end use device allocation problem in secondary metal production and semi fabrication has been modeled using this model the particular case of colombia where low carbon electricity is available has been studied by improving energy efficiency energy use and co2 emissions can be reduced significantly 73 and 72 respectively at negative costs further co2 emissions reductions up to 88 are possible with fuel switching to low carbon electricity increasing the costs for the energy system however cost reductions caused by energy efficiency improvement outweigh cost increments of fuel switching benefits achieved with fuel substitution using low carbon electricity can be lost if hydropower is not available in such a case efficient natural gas fired end use devices are preferable

energy efficiency economics and policy energy efficiency and conservation are major factors in the reduction of the environmental impact of the energy sector particularly with regard to climate change energy efficiency also contributes to reducing external dependence and vulnerabilities in the energy domain in this paper we discuss the factors that influence energy efficiency and conservation decisions and the most appropriate policies for their promotion although not all public policies seem justified we argue that specific policies for promoting energy conservation may be required preferably based on economic instruments or on the provision of information to consumers

modelling and forecasting the demand for natural gas in pakistan abstract this study examines both the short and long term dynamics of natural gas consumption in pakistan through an econometric model sector specific income price and cross price elasticities of natural gas demand are estimated over the period 1978 2011 the estimated income elasticities indicate that real gdp per capita exerts a larger impact on gas consumption as compared to its price the price and cross price elasticities are relatively low indicating consumers indifference in pakistan towards price escalation they neither decrease gas consumption nor try to explore less expensive substitutes for natural gas a validation of the estimated demand equations is performed showing high degree of accuracy through tracking the historical data in order to determine the future outlook of natural gas demand sectoral equations are simulated as baseline both moderate and extreme demand scenarios are projected for the period 2012 2020 ex post simulation resulting through baseline scenario suggests that the power sector is more likely to occupy top position in terms of natural gas consumption it is expected that the natural gas consumption would reach 734 062 mmcft by 2020 followed by the transport sector 238 943 mmcft industrial sector 541 869 mmcft residential sector 304 821 mmcft and the commercial sector 72 784 mmcft furthermore simulation results based on moderate and extreme scenarios reveal that a deliberate increase in natural gas prices reduces per capita natural gas consumption significantly over the forecast time horizon 2012 2020 the findings of this study have significant implications with respect to energy conservation and economic development particularly price and income elasticities have practical relevance for appropriate pricing and income policies additionally forecast results can provide useful support for designing an appropriate infrastructure and investment plan with reference to gas market in future

the characteristics of energy efficiency measures a neglected dimension abstract the diffusion of cost effective energy efficiency measures eems in firms is often surprisingly slow this phenomenon is usually attributed to a variety of barriers which have been the focus of numerous studies over the last two decades however many studies treat eems homogenously and assume they have few inherent differences apart from their profitability we argue that complementing such analyses by considering the characteristics of eems in a structured manner can enhance the understanding of eem adoption for this purpose we suggest a classification scheme for eems in industry which aims to provide a better understanding of their adoption by industrial firms and to assist in selecting and designing energy efficiency policies the suggested classification scheme is derived from the literature on the adoption of eems and the related fields including the diffusion of innovations eco innovations and advanced manufacturing technology our proposed scheme includes 12 characteristics based on the relative advantage the technical and the information context of the eem applying this classification scheme to six example eems demonstrates that it can help to systematically explain why certain eems diffuse faster than others furthermore it provides a basis for identifying policies able to increase the rate of adoption

how high are option values in energy efficiency investments high implicit discount rates in consumers energy efficiency investments have long been a source of controversy in several recent papers hassett and metcalf argue that the uncertainty and irreversibility attendant to such investments and the resulting option value account for this anomalously high implicit discounting using their model and data we show that to the contrary their analysis falls well short of providing an explanation of this pattern

energy expenditure economic growth and the minimum eroi of society we estimate energy expenditure for the us and world economies from 1850 to 2012 periods of high energy expenditure relative to gdp from 1850 to 1945 or spikes 1973 74 and 1978 79 are associated with low economic growth rates and periods of low or falling energy expenditure are associated with high and rising economic growth rates e g 1945 1973 over the period 1960 2010 for which we have continuous year to year data for control variables capital formation population and unemployment rate we estimate that statistically in order to enjoy positive growth the us economy cannot afford to spend more than 11 of its gdp on energy given the current energy intensity of the us economy this translates in a minimum societal eroi of approximately 11 1 or a maximum tolerable average price of energy of twice the current level granger tests consistently reveal a one way causality running from the level of energy expenditure as a fraction of gdp to economic growth in the us between 1960 and 2010 a coherent economic policy should be founded on improving net energy efficiency this would yield a double dividend increased societal eroi through decreased energy intensity of capital investment and decreased sensitivity to energy price volatility

energy eroi and quality of life abstract the near and long term societal effects of declining eroi are uncertain but probably adverse a major obstacle to examining social implications of declining eroi is that we do not have adequate empirical understanding of how eroi is linked directly or indirectly to an average citizen s ability to achieve well being to evaluate the possible linkages between societal well being and net energy availability we compare these preliminary estimates of energy availability 1 eroi at a societal level 2 energy use per capita 3 multiple regression analyses and 4 a new composite energy index lambert energy index to select indicators of quality of life hdi percent children under weight health expenditures gender inequality index literacy rate and access to improved water our results suggest that energy indices are highly correlated with a higher standard of living we also find a saturation point at which increases in per capita energy availability greater than 150 gj or eroi above 20 1 are not associated with further improvement to society

economics and rational conservation policy energy analysts have long been concerned with the apparently low level of energy efficient investments and have suggested the presence of various market barriers and failures that hinder investment the concept of a barrier as defined here is some force that is working against investment in energy efficient technologies market failures on the other hand are failures of the competitive paradigm that lead to economically inefficient outcomes market barriers require no particular response on the part of government while market failures may call for some policy response

technological change and the boundaries of the firm the authors examine a firm s decision either to produce an essential input itself or to hire a subcontractor to produce the input the authors focus on how this decision is affected by technological change in the industry in general cost reducing technological change leads the firm to produce the input itself more often the firm s calculus is shown to depend on whether the subcontractor s skills are idiosyncratic or transferable in the latter case technological progress can even be detrimental to the firm and to society as a whole copyright 1991 by american economic association

three laws of energy transitions the paper formulates and explores a hypothesis on three general energy transition laws the law of stable long term energy costs to income ratio the law of improving energy quality and the law of growing energy productivity these laws are essential for shaping long term projections and checking for their consistency all three are rooted in amazingly stable in time and universal across countries energy costs to income ratios limited energy purchasing power sets up thresholds which if exceeded bring asymmetry to energy demand to price elasticity the author believes that the theoretical postulate on the substantial substitution among production factors which is used in the production functions theory may be incorrect in reality innovations mainly lead to the substitution of a low quality production factor with the same yet of a better quality improving energy quality with stable costs to income ratio is accompanied by growing energy productivity energy costs to income thresholds are indicators allowing for better projections of oil prices

globalization of production and innovation how outsourcing is reshaping an advanced manufacturing area cusmano l mancusi m l and morrison a globalization of production and innovation how outsourcing is reshaping an advanced manufacturing area regional studies this paper investigates the determinants and the spatial and functional dimensions of firms outsourcing based on a large survey of manufacturing firms in lombardy italy the analysis shows that outsourcing is remarkably wide across sectors and has a clear regional dimension concerning highly skilled firms at most offshoring is still a minor fraction of the deverticalization process largely related to wider strategies of internationalization by foreign group subsidiaries at intermediate stages of the value chain the evidence suggests the regional system is inserting onto global knowledge networks but also points at the risk of branch plant effects in high technology segments cusmano l mancusi m l et morrison a la mondialisation de la production et de l innovation comment l approvisionnement a l exterieur reorganise une zone ind

eroi of different fuels and the implications for society abstract all forms of economic production and exchange involve the use of energy directly and in the transformation of materials until recently cheap and seemingly limitless fossil energy has allowed most of society to ignore the importance of contributions to the economic process from the biophysical world as well as the potential limits to growth this paper centers on assessing the energy costs of modern day society and its relation to gdp our most important focus is the characteristics of our major energy sources including each fuel s energy return on investment eroi the eroi of our most important fuels is declining and most renewable and non conventional energy alternatives have substantially lower eroi values than traditional conventional fossil fuels at the societal level declining eroi means that an increasing proportion of energy output and economic activity must be diverted to attaining the energy needed to run an economy leaving less discretionary funds available for non essential purchases which often drive growth the declining eroi of traditional fossil fuel energy sources and the effect of that on the world economy are likely to result in a myriad of consequences most of which will not be perceived as good

assessing the impacts of preferential procurement on low carbon building abstract the significance of global warming is shaping building procurement with much of the effort aimed at reducing greenhouse gas emissions through a preferential bidding mechanism however only a limited number of studies have quantitatively estimated the potential impact of bid preference on the emission reduction from building construction the aim of this paper is to improve our understanding of how bid discounts change owners procurement costs and the magnitudes of emission mitigation a two stage optimization model is designed to help the owner determine the discount rate that would automatically control the emission of the awarded contract within a desired level the goal is for bidders to regard emission reduction efforts as an investment with returns coming in the form of an increased chance of winning the bid our results imply that for the building retrofit project studied herein a discount rate of 0 6 is suggested for every percentage of emission reduction this discount level reduces greenhouse gas emissions by 28 2 while raising procurement costs by 3 7 relative to a non preference mechanism the increased procurement costs can be partially compensated under existing cap and trade scheme the results show that the choice of discount significantly alters bidders efforts on emission mitigation and emission control cost can be minimized with the proposed optimization algorithm

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

optimal timing of technology adoption abstract in a dynamic programming framework this paper investigates the optimal timing of technology adoption by a competitive firm when technology choice is irreversible and the firm faces a stochastic innovation process with uncertainties about both the speed of the arrival and the degree of improvement of new technologies a numerical example illustrates how the optimal timing decision is affected by changes in parameter values reflecting market conditions the firm s initial technological attributes and the characteristics of the stochastic innovation process some of these effects turn out to be in sharp contrast to common intuition contrasting the optimal decision rule derived here with the rule obtained under the net present value shows that the former implies a slower pace of adoption than implied by the latter the optimal decision rule is generalized for the case of multiple technology switches and it is shown that for all the switching decisions except the last one the optimal rule satisfies the net present value criterion

differences in co2 emissions of solar pv production among technologies and regions application to china eu and usa abstract a widespread implicit assumption is that renewable energy options are approximately low carbon however production and life cycles of such technologies tend to produce co2 emissions to minimize life cycle emissions one should account for such emissions and implement adequate policies to encourage innovation and adoption of well performing technologies in this respect we develop a framework to analyse this issue grounded in the concepts of energy return on energy invested eroi and net energy return on carbon invested eroc applying these to the main pv technologies and production regions namely china eu and usa displays considerable discrepancies we conditionally predict the development of average eroi and eroc over time under business as usual and low carbon electricity generation scenarios a main policy lesson is that without a systemic policy instrument such as carbon pricing incentives for low carbon production of renewable energy options are too weak which likely will delay a complete transition to a low carbon economy

a review of optimal energy policy instruments on industrial energy efficiency programs rebound effects and government policies abstract industrial energy efficiency programs ieeps are defined as one of the most popular government policies that aim to reduce energy consumption in industrial energy intensive sectors in this paper we review and classify the most important academic studies that have addressed the environmental and economic aspects of ieeps using a systematic review the classification of energy policy instruments has been developed based on an analytical approach we discuss also the outputs benefits and barriers of ieeps besides a comprehensive argument about the restrictive policies on the rebound effects made after the implementation of these programs the results disclose that china usa and sweden are the most addressed countries on ieeps and their applications in this regard incentive energy policies e g voluntary agreements and subsidies have been applied more than others in the last decade furthermore most of the reviewed studies emphasize energy price reform as an effective practical policy while a few analytical methods can be seen to help policy makers determine the optimal levels of decision variables finally according to the state of the art analysis the authors provide some novel recommendations to improve the performance of ieeps using some restrictive policies on the negative impacts of rebound effects

do combined heat and power plants perform case study of publicly funded projects in new york abstract we investigate lower than expected capacity factors of combined heat and power plants using a publicly available dataset of hourly performance for plants in the state of new york low utilization of a chp indicates underperformance we examine possible causes of this underperformance including economic arbitrage poor maintenance and operational practices oversizing of plants and reliability and resiliency needs based on seasonal and weekday weekend capacity factor averages we find that there is not enough evidence to support the economic arbitrage cause out of 99 plants in the dataset 64 plants have average capacity factor below 60 indicating they are either oversized and or poorly maintained this suggests that the current practice of one time fixed incentive kw favors investment in capacity with no incentive for utilization unlike a production credit which incentivizes generation kw h from a policy perspective this paper recommends better pre engineering assessment for correct sizing as well as revision of incentives based on performance additional information should be collected so that a more accurate ongoing analysis of the societal benefits of chp projects can be made lastly the energy efficiency gap may be smaller than is commonly assumed and other options should be explored to meet energy efficiency goals

triggers and barriers to energy efficiency measures in the ceramic cement and lime sectors evaluating and understanding the interplay of barriers to the diffusion of energy efficiency measures is highly relevant because if policies are effective in overcoming these barriers co2 emissions can be decreased at low cost the study aims to understand how managers make decisions to invest in energy efficiency how perceived barriers affect these decisions and how policy can overcome these barriers we apply neo classical economic theory as well as insights from transaction cost economics and behavioural economics to understand why hurdle rates even when omitted costs and risk are taken into account are higher than the weighted average cost of capital we find that internal capital budgeting rules and the effort of studying technical feasibility and profitability are relevant to understanding the efficiency gap the results indicate that the voluntary agreement and the emission trading scheme are complementary addressing different barriers in different contexts

toward a non linear dynamics of technological progress abstract the paper explores the characteristics of technological change from an historical perspective in particular it attempts to elucidate the nature of the pattern of successive breakthroughs followed by rapid improvement and scale up followed by maturation and an approach to configuration dependent physical limits followed by a new breakthrough the paper proceeds with the analysis of a number of specific cases of technological evolution several examples are presented that clearly exemplify the barrier breakthrough pattern but other important examples semi conductors and computers seem to offer alternative interpretations e g continuous breakthrough the paper concludes with a discussion of the notion of technological distance and some tentative generalizations that might prompt further research

dynamic incentives by environmental policy instruments a survey abstract in this paper i survey and discuss recent developments on the incentives provided by environmental policy instruments for both adoption and development of advanced abatement technology a main conclusion to be drawn from the literature is that under competitive conditions market based instruments usually perform better than command and control moreover taxes may provide stronger long term incentives than tradable permits if the regulator is myopic if the government can anticipate new technology or is able to react on it optimally regulatory policies by virtue of administered prices taxes and policies by setting quantities issuing tradable permits are almost equivalent the literature also shows that under competitive conditions there is no difference between auctioning permits and grandfathering moreover timing and commitment of environmental policy is not crucial for adoption under competitive conditions commitment has positive incentive effects however if an r d sector has market power in the presence of market imperfections the ranking of the different policy instruments is ambiguous

the impact of increased efficiency in the industrial use of energy a computable general equilibrium analysis for the united kingdom the conventional wisdom is that improving energy efficiency will lower energy use however there is an extensive debate in the energy economics policy literature concerning rebound effects these occur because an improvement in energy efficiency produces a fall in the effective price of energy services the response of the economic system to this price fall at least partially offsets the expected beneficial impact of the energy efficiency gain in this paper we use an economy energy environment computable general equilibrium cge model for the uk to measure the impact of a 5 across the board improvement in the efficiency of energy use in all production sectors we identify rebound effects of the order of 30 50 but no backfire no increase in energy use however these results are sensitive to the assumed structure of the labour market key production elasticities the time period under consideration and the mechanism through which increased government revenues are recycled back to the economy

mobilizing private finance for low carbon innovation a systematic review of barriers and solutions this paper analyses the field of innovation studies regarding barriers to low carbon innovation and consequences for finance investment and divestment and contributes to a more holistic understanding of the underlying mechanisms a combination of technological barriers combined with economic barriers institutional and political barriers contribute to sub optimal low carbon investment all along the innovation cycle policy makers need to take a systemic approach to enable the redirection of diverse private financial sources instruments range from cutting dirty r d subsidies and support for clean technology innovation and diffusion levelling the institutional playing field and making risks of high carbon and low carbon technologies transparent to providing a consistent but adaptive long term transition strategy this would allow financiers to gradually shift their investments away from high carbon mainstream markets and scale low carbon technology niche markets however financiers also need to sharpen their competencies with regard to new clean technologies and markets

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

passive house at the crossroads the past and the present of a voluntary standard that managed to bridge the energy efficiency gap abstract improving energy efficiency in dwellings is generally seen as the low hanging fruit of climate change mitigation in particular decreased heat loss through better insulation is suggested as one of the most cost effective means to achieve the ambitious national and international goals of climate gas reduction however the literature shows that a profitable technological solution is not sufficient to reach the energy goals aspects such as a lack of information unobserved costs and heterogeneity among users can compromise the success of technical innovation still there are successful concepts that drive the technological development in the construction sector the passive house is an example for such innovations that manage to bridge the energy efficiency gap this paper addresses the passive house concept and standard as a success story of technological innovation with bruno latour s science in action 1987 as a starting point we describe the conditions under which the standard was created the role of the network built around the passive house institute and the consequences of exporting the standard we identify success factors that have supported the diffusion of the passive house standard and concept and discuss its possible development in the current situation which is characterized by its wide spread adoption

save production a bottom up energy model for dutch industry and agriculture a new version of the model save production simulates the development of energy use in the dutch industry and agriculture including combined heat and power generation the model disaggregates national energy consumption into fuel types industrial sectors energy functions and energy technologies simulation is based on microeconomic investment behavior examples of model application show results on the penetration of combined heat and power in relation to policy instruments such as co2 prices electricity price support and investment subsidies policies that discriminate on co2 emissions result in a slightly more efficient heat and power generation tailored to the dutch situation save production is well equipped to generate outlooks for the dutch industrial and agricultural energy use and for analyzing the role of policies in detail its main strength lies in the middle term simulation of decision making on energy saving technologies and analysis of policy effects specific precautions are required when the model is used for analysis on the longer term for simulating extreme policies or for the analysis of extremely fluctuating energy prices

returns on investments in energy saving technologies under energy price uncertainty in dutch greenhouse horticulture conventional net presentvalue calculations evaluating the profitabilityof investments in energy saving technologies indutch horticultural outlays predict a muchhigher rate of adoption of these technologiesthan is actually observed this paper tries toexplain this gap by applying a real optionsframework hurdle rates for investments in twotypes of energy saving technology are estimatedusing simulated future revenue streams givenuncertainty regarding energy prices and energytax policies hurdle rates found in this wayare on average about 1 76 times the hurdlerates that result from net present valuecalculations furthermore this paper tests thepredictive value of the theory by estimating alogit model this model relates the incidenceof having invested in an energy savingtechnology to the difference between the returnon investment and the hurdle rate thepredictive power turns out to be encouraging as the statistical tests indicate that higherhurdle rates tend to reduce rates of technologyadoption

barriers to energy efficiency in industrial bottom up energy demand models a review the goal of this paper is to review bottom up models for industrial energy demand with a particular focus on their capability to model barriers to the adoption of energy efficient technologies the integration of barriers into the models is an important prerequisite for a more detailed and realistic modeling of policies for energy efficiency particularly with the emergence of more and more varying policy instruments it also becomes crucial for the models to take account of these policies as well as the barriers they address in a more realistic way our review revealed that despite the broadly evident existence of market failures and barriers for energy efficient technologies they are only partly and in a rather aggregated form considered in today s bottom up models the state of the art bottom up model is based on an explicit representation of the technology stock and considers the costs of energy efficiency options in detail but with regard to barriers most models only make use of an aggregated approach like an adjusted discount rate while some models do not even consider technology costs and energy prices but instead use exogenous technology diffusion rates other more advanced models took first steps towards considering barriers in more detail the latter allows differentiation between multiple parameters that influence technology adoption still even in the most advanced models only a few of the observed barriers are explicitly considered at the same time new approaches to considering barriers like uncertainty or the slow spread of information are being developed in other disciplines we conclude the paper by summarizing promising ways to improve representation of barriers in bottom up models

explaining the energy efficiency gap expected utility theory versus cumulative prospect theory abstract energy efficiency is one of the key factors in mitigating the impact of climate change and preserving non renewable resources although environmental and economic justifications for energy efficiency investments are compelling there is a gap between the observable and some notion of optimized energy consumption the so called energy efficiency gap behavioral biases in individual decision making have been resonated by environmental research to explain this gap to analyze the influence of behavioral biases on decisions upon energy efficiency investments quantitatively we compare expected utility theory with cumulative prospect theory on basis of a real world example we illustrate how the extent of the gap is influenced by behavioral biases such as loss aversion probability weighting and framing our findings indicate that cumulative prospect theory offers possible explanations for many barriers discussed in literature for example the size of the gap rises with increased risk and investment costs because behavioral biases are systematic and pervasive our insights constitute a valuable quantitative basis for environmental policy measures such as customer focused and quantitatively backed public awareness campaigns financial incentives or energy savings insurances in this vein this paper may contribute to an accelerated adaption of energy efficiency measures by the broader public

connecting net energy with the price of energy and other goods and services net energy is intuitively compelling and useful in calculating total impacts e g primary energy greenhouse gases land use and water requirements of delivering useful energy to the larger economy however it has little policy impact unless connected quantitatively to the price of energy and other goods and services i present an input output io based method to do this the method is illustrated by a two sector model fitted to u s io economic data in an io characterized system the energy returned on energy invested eroi and the energy intensity of energy are directly related however eroi and prices are not uniquely related because they depend differently on four independent io coefficients representing internal structure of and the relationship between the energy sector and the rest of the economy if only one of these coefficients varies then eroi does uniquely determine prices uncertainties in the io coefficients as well as persistent issues of choosing system boundary and aggregating diverse energy types further complicate the eroi price connection in this context i review two recent empirical comparisons of u s oil and gas prices and eroi for 1954 2007

modes of governance for municipal energy efficiency services the case of led street lighting in germany energy efficiency retrofits are often impeded by high perceived investment risks long payback periods and a lack of skills at the municipal level these issues are particularly pronounced as procuring implementing and managing retrofits can exceed existing municipal governance capacities the diffusion of municipal led street lighting as a replacement for conventional lighting serves as an example this paper argues that technological e g complexity and maturity economic e g selling services vs products and financing costs institutional e g property situation and contracts and competency barriers to retrofitting e g lack of measurement capacity and qualified facilitators translate into transaction costs we develop a taxonomy of appropriate modes of municipal retrofitting governance based on transaction costs economics the findings indicate that more market based solutions energy performance contracts in particular can facilitate the procurement of innovative energy efficiency retrofitting solutions and associated investments among municipalities if neutral tenders open book accounting municipal ownership and intermediary organisations allow municipalities to choose appropriate governance structures for particular technologies and retrofits