Economic benefits of energy conservation
''Energy Conservation'' is taken to be the entire effort to shift the Nation's economy from pre-1973 trends of energy use to the pattern of uses which constitute ''Energy Thrift.'' The magnitude of such cost-effective conservation can be estimated from marginal rates of substitution between energy and other factors of production, in response to the differential costs of energy in response to environmental and other increments of cost. It can be shown that post-1973 fuel price increases are consistent with the effects of environmental costs alone, and that conservation-oriented responses are more cost-effective than supply-expanding responses. This net cost-effectiveness constitutes the economic benefit of conservation. ... The benefits of conservation are realized in different ways by the various end-use sectors of the economy. The residential and commercial sectors can achieve numerous benefits by operational improvements, but efficiency-improving changes to the existing stock are much more important. Industry's benefits come through major changes in the nature of future processes. For transportation, mode shifts are the most important aspect for freight, but increased auto efficiency is most important for passenger transport. Utility conservation arises both directly, in improved generation efficiency, and indirectly through more efficient use of electricity. The benefits of conservation can also be characterized in terms of impacts on various aspects of the economy. The most obvious of these is the capital requirement: while this is large, it is smaller than either the capital for supply expansion or the capitalization of increased fuel costs in lieu of conservation. ... The environmental benefits of conservation are significant. ... Conservation means increased labor intensiveness; this implies higher employment, but lower labor productivity. (auth, abstract modified)
- Research Organization:
- Federal Power Commission, Washington, D.C. (USA). Office of Energy Systems; Federal Power Commission, Office of Energy Systems, Washington, DC
- OSTI ID:
- 7366594
- Report Number(s):
- CONF-751216-2
- Resource Relation:
- Conference: Proceedings of energy conservation, Ft. Lauderdale, FL, USA, 1 Dec 1975
- Country of Publication:
- United States
- Language:
- English
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