Energy demand in the residential sector and the role of irreversible intensity reductions: Evidence from some OECD countries over the period 1973-1990

Technical Report · Sun Dec 31 04:00:00 EST 1995

OSTI ID:416363

Haas, R; Schipper, L ^[1]

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1. Lawrence Berkeley Lab., CA (United States)

For a long time economists have been convinced that prices and income are sufficient to explain the development of energy demand and that there is no need to worry about efficiency. Indeed, this hypothesis turned out to be successful to describe energy demand over the period of increasing oil prices from 1973 until 1983. Furthermore, with respect to efficiency and the derived potential for energy conservation, economists have often been skeptical. They argue, that energy savings achieved by higher efficiency will be outweighed by an increase in service demand and, straightforward, an increase in energy demand, see e.g Khazzoom. Obviously, this pretention was associated with the assumption that elasticities derived from increasing energy (and service) prices would be the same for {open_quotes}service becoming cheaper (due to the better efficiency){close_quotes}. With the recognition that energy demand did not rebound in times of declining energy prices (as it should have done due to the economic text books) the relevance of efficiency for describing future energy demand has to be revisited. This is of tremendous importance with regard to the current environmental problems and the lack of ideas how to cope with them. Only if we know how improved efficiency affects energy demand a sound basis for decisions to be made by (energy) politicians can be provided. E.g., if we know the {open_quotes}elasticity of efficiency{close_quotes} we can better describe the anticipated energy savings due to standards.

• Research Organization: International Association for Energy Economics, Cleveland, OH (United States)
• OSTI ID: 416363
• Report Number(s): CONF-9507139--
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
ECONOMIC ELASTICITY
ENERGY DEMAND
FORECASTING
INCOME
OECD
PRICES
RESIDENTIAL SECTOR