Experience with Conservation
Policies/Programs :
Cost and Effectiveness
Suzanne Goldberg
MKJA &
School of Resource and Environmental Management
Simon Fraser University
April 19, 2011
4/2011
Jaccard-Goldberg MKJA/EMRG
1
Achieving energy & greenhouse
gas reductions
Actions by households and firms
–  Energy efficiency and conservation
–  Fuel switching (away from fossil fuels)
–  Emissions capture and storage
–  “The rest” (industrial processes, landfill management,
agriculture, forestry)
-------------------------------------------------------------------Policies/Programs by government and institutions to drive actions
–  Information
–  Subsidies
–  Regulations - (product standards)
–  Zoning, approvals, and building codes
–  Market-oriented (property tax shifting, DCC (TCA))
4/2011
Jaccard-Goldberg MKJA/EMRG
2
Conservation as a strategy for
energy & greenhouse gas
reduction: 1985-2010
Actions: Energy efficiency
*Assumption: This is the cheapest and easiest
action, so do it first.
Policies: Information programs and “subsidies” to
increase energy efficiency
*Assumption: Energy efficiency is profitable, these
general & voluntary policies should be sufficient.
4/2011
Jaccard-Goldberg MKJA/EMRG
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Estimated effectiveness of
efficiency subsidies in Canada
Rivers and Jaccard, 2010
4/2011
Jaccard-Goldberg MKJA/EMRG
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Cost to firms and households
Assumption – Energy efficiency is cheap and profitable
Issue #1 – Overlooks risks and quality differences in
technologies (transit vs. cars, lightbulbs)
•
ignores new tech and long payback risk
•
ignores consumers’ preferences as technologies are
rarely perfect substitutes
If costs associated with risks and consumer preferences
are included, efficiency cost can increase significantly
depending on how these are estimated.
4/2011
Jaccard-Goldberg MKJA/EMRG
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Effect on energy use
Assumption: Energy efficiency is an easy action and noncompulsory programs are sufficient.
Issue #2 – misplaced optimism about the aggregate effect of
energy efficiency actions
•
4/2011
Free-ridership efficiency action would have happened
anyways (technologies become more efficient over time)
Jaccard-Goldberg MKJA/EMRG
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Evolution of fridge energy
efficiency
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Kwh/m3
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average fridge efficiency
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must accelerate efficiency trend
1950s
4/2011
1960s
1970s
1980s
Jaccard-Goldberg MKJA/EMRG
1990s
2000s
7
Effect on energy use
Assumption: Energy efficiency is an easy action and noncompulsory programs are sufficient.
Issue #2 – misplaced optimism about the aggregate effect of
energy efficiency actions
4/2011
•
Free-ridership efficiency would have happened anyways
(technologies become more efficient over time)
•
rebound effect reduced energy service costs result in
greater service use (driving more)
•
mega-rebound effect gains in energy productivity drive
economic growth, spill-over to other energy services and
foster the creation of new services (decorative lighting,
patio heater, desk-top fridge, wine cooler, beer cooler,
water cooler)
Jaccard-Goldberg MKJA/EMRG
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US household devices –
electricity consumption
Electricity consumption per household (kWh)
4000 Steve Groves, SFU – 2009
3000
Imaging
Telephone
Air conditioning
and refrigeration
2000
Television
1000
Personal care
Thermal
Labour saving
0
1976
4/2011
Computer
Audio
1981
1986
1991
1996
Year
Jaccard-Goldberg MKJA/EMRG
2001
2006
9
Policy history lesson:
≠ Likely Reduced Consumption

Voluntary and wide-ranging policies such as information campaigns
and subsidies (labeling, ads, rebates) are not likely to be sufficient.
= Likely Reduce Consumption

4/2011
Compulsory , targeted & market-based programs/policy like …
•
Basic regulations (efficiency standards),
•
Market –based programs (targeted financing levers,
property taxes, infrastructure taxes, properly pricing
electricity and development)
•
Zoning and development approvals (for roads and building
development)
Jaccard-Goldberg MKJA/EMRG
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Policy history lesson:
Voluntary (non-compulsory) programs/policy
Information to promote voluntary action (labeling, ads)
Subsidies to promote voluntary action (tax credits, grants, low-interest
loans, offset subsidies)
≠
Compulsory and market-based programs/policy
Basic regulations (efficiency standards)
Market –based programs (financing levers)
Emissions pricing – (carbon tax, cap and trade permits, properly pricing
electricity – cost of new supply plus externality)
Market-oriented regulations (vehicle emission standards, renewable
electricity quotas)
4/2011
Jaccard-Goldberg MKJA/EMRG
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End
4/2011
Jaccard-Goldberg MKJA/EMRG
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