Defining and estimating opportunity costs for energy resources. Final technical report
Technical Report
·
OSTI ID:7357731
The focus of this report and the proposed research is on applying two of the most fundamental principles of economics (logic) to energy. Market prices should reflect the minimum true social cost of energy consumption; decisions on production and consumption should be made by millions of decentralized decision makers guided by market prices, by their self-interest, and by their intimate knowledge of costs, values, and substitutions. No allocation scheme outside of market prices offers significant hope for utilizing the intimate knowledge and motivation of millions of decentralized decision makers and for attaining the self-correcting property of good market operations. Opportunity cost is the loss from foregone opportunities; in this study, the opportunity cost of a unit of energy consumed is the social cost of foregoing the opportunity to save it for ''later use.'' The cost can be high if the best substitute in this ''later use'' is very expensive and must be introduced soon; it is low if the best substitute is inexpensive or unnecessary for many years. (27 references) (GRA)
- Research Organization:
- Faucett (Jack) Associates, Inc., Chevy Chase, Md. (USA); Jack Faucett Associates Inc., 5454 Wisconsin Avenue, Suite 1150, Chevy Chase, MD 20015
- OSTI ID:
- 7357731
- Report Number(s):
- PB-243627; NSF/RA/N-74-210
- Country of Publication:
- United States
- Language:
- English
Similar Records
Evolving electric utility regulatory policy: Internalizing the social costs of production
Second best pricing policies for an exhaustible resource
Energy performance standards: a look at the economic issues
Journal Article
·
Wed Mar 31 23:00:00 EST 1993
· American Journal of Economics and Sociology; (United States)
·
OSTI ID:6218342
Second best pricing policies for an exhaustible resource
Journal Article
·
Mon Jan 31 23:00:00 EST 1977
· Am. Econ. Rev.; (United States)
·
OSTI ID:7306096
Energy performance standards: a look at the economic issues
Conference
·
Mon Dec 31 23:00:00 EST 1979
·
OSTI ID:6611545