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Abstract In this paper, we analyze the rationale for an energy policy mix when the European Emissions Trading Scheme (ETS) is considered from a public choice perspective. That is, we argue that the economic textbook model of the ETS implausibly assumes (1) efficient policy design and (2) climate protection as the single objective of policy intervention. Contrary to these assumptions, we propose that the ETS originates from a political bargaining game within a context of multiple policy objectives. In particular, the emissions cap is negotiated between regulators and emitters with the emitters' abatement costs as crucial bargaining variable. This public choice view yields striking implications for an optimal policy mix comprising RES supporting policies. Whereas the textbook model implies that the ETS alone provides sufficient climate protection, our analysis suggests that support for renewable energies (1) contributes to a more effective ETS-design and (2) may even increase the overall efficiency of climate and energy policy if other externalities and policy objectives besides climate protection are considered. Thus, our analysis also shows that a public choice view not necessarily entails negative evaluations concerning efficiency and effectiveness of a policy mix.

Abstract We demonstrate the importance of stock turnover on industrial energy efficiency through a literature review and a case study of energy-intensive equipment, i.e. the electric arc furnace in the US steel industry. We describe the common methods for assessing stock turnover. We have found that both stock turnover and retrofit are important elements to explain the energy efficiency improvement rates. We investigated the development of electricity use in electric arc furnaces in the United States by tracking the development of individual furnaces over the period 1990–2002. This provides a detailed picture of changes in the stock or fleet of furnaces through turnover and/or retrofit. Our results confirm the results of other empirical studies that there is no clear lifetime of equipment. However, retired furnaces are distinctly less efficient than furnaces remaining in the stock, while new furnaces are distinctly more efficient than the average stock. We found an annual average improvement in specific electricity consumption of 1.3%/year over the studied period, of which 0.7%/year was due to stock turnover and 0.5%/year due to retrofit of stock in service throughout the period.

Abstract Many energy-related investments are made without a clear financial understanding of their values, risks, and volatilities. In the face of this uncertainty, the investor—such as a building owner or an energy service company—will often choose to implement only the most certain and thus limited energy-efficiency measures. Conversely, commodities traders and other sophisticated investors accustomed to evaluating investments on a value, risk, and volatility basis often overlook energy-efficiency investments because risk and volatility information are not provided. Fortunately, energy-efficiency investments easily lend themselves to such analysis using tools similar to those applied to supply side risk management. Accurate and robust analysis demands a high level of understanding of the physical aspects of energy-efficiency, which enables the translation of physical performance data into the language of investment. With a risk management analysis framework in place, the two groups—energy-efficiency experts and investment decision-makers—can exchange the information they need to expand investment in demand-side energy projects. In this article, we first present the case for financial risk analysis in energy efficiency in the buildings sector. We then describe techniques and examples of how to identify, quantify, and manage risk. Finally, we describe emerging market-based opportunities in risk management for energy efficiency.

Abstract Like cities, many large national parks in the United States often include “urban” visitor and residential areas that mostly demand (rather than produce) energy and key urban materials. The U.S. National Park Service has committed to quantifying and reducing scopes 1 and 2 emissions by 35% and scope 3 emissions by 10% by 2020 for all parks. Current inventories however do not provide the specificity or granularity to evaluate solutions that address fundamental inefficiencies in these inventories. By quantifying and comparing the importance of different inventory sectors as well as upstream and downstream emissions in Yosemite National Park (YNP), this carbon footprint provides a case study and potential template for quantifying future emissions reductions, and for evaluating tradeoffs between them. Results indicate that visitor-related emissions comprise the largest fraction of the Yosemite carbon footprint, and that increases in annual visitation (3.43–3.90 million) coincide with and likely drive interannual increases in the magnitude of Yosemite′s extended inventory (126,000–130,000 t CO2e). Given this, it is recommended that “per visitor” efficiency be used as a metric to track progress. In this respect, YNP has annually decreased kilograms of GHG emissions per visitor from 36.58 (2008) to 32.90 (2011). We discuss opportunities for reducing this measure further.

Abstract The benefit-cost analysis of standards to reduce vehicle greenhouse gas emissions and improve fuel economy by the U.S. Environmental Protection Agency (EPA) and the Department of Transportation (DOT) displays large net benefits from fuel savings for new vehicle buyers. This finding points to an energy efficiency gap: the energy-saving technology provided in private markets appears not to include all the technologies that produce net private benefits. The gap exists if the costs of energy-saving technologies are lower than the present value of fuel reductions, and “hidden costs” – undesirable aspects of the new technologies – do not exceed the net financial benefits. This study examines the existence of hidden costs in energy-saving technologies through a content analysis of auto reviews of model-year 2014 vehicles. Results suggest that it is possible to use fuel-saving technologies on vehicles without imposing hidden costs. For each technology examined, reviews with positive evaluations outnumbered those with negative evaluations. Evidence is scant of a robust relationship between vehicles’ use of energy-saving technologies and negatively rated operational characteristics, such as handling or acceleration. Results do not provide evidence for hidden costs as the explanation of the efficiency gap for vehicle fuel-saving technologies.

This paper analyses the impact of postponing global mitigation action on abatement costs and energy systems changes in China and India. It compares energy-system changes and mitigation costs from a global and two national energy-system models under two global emission pathways with medium likelihood of meeting the 2 °C target: a least-cost pathway and a pathway that postpones ambitious mitigation action, starting from the Copenhagen Accord pledges. Both pathways have similar 2010–2050 cumulative greenhouse gas emissions. The analysis shows that postponing mitigation action increases the lock-in in less energy efficient technologies and results in much higher cumulative mitigation costs. The models agree that carbon capture and storage (CCS) and nuclear energy are important mitigation technologies, while the shares of biofuels and other renewables vary largely over the models. Differences between India and China with respect to the timing of emission reductions and the choice of mitigation measures relate to differences in projections of rapid economic change, capital stock turnover and technological development. Furthermore, depending on the way it is implemented, climate policy could increase indoor air pollution, but it is likely to provide synergies for energy security. These relations should be taken into account when designing national climate policies.

This paper aims to fill a research gap in the area of consumer-citizen attitudes to business models for decentralized energy storage, at the level of households and buildings. The study focuses on the interaction of such attitudes and their underlying motivation factors with socio-cultural, contextual factors. Self-determination theory (SDT) is used as a theoretical framework, to connect interpersonal and contextual factors, addressing the question of how contexts influence the motivation to support energy storage. Drawing on SDT, this study examines the role of autarky (independence from the energy system), autonomy (control over energy management) and relatedness (degree of sharing required) in this regard, embedded and interpreted in the socio-cultural local context of two demonstration sites in Sweden and Portugal. A mixed method approach is used. Quantitative survey data provides information on local social and cultural dimensions, followed by stakeholder consultation workshops that elicit participants’ views on different models of decentralized energy storage. The findings raise questions of how to improve autarky and autonomy for prosumers, while keeping the need for time investment low and provide flexibility regarding the required degree of interaction between prosumers. Implications for business models and policy support for citizen-centered sustainable urban energy systems are derived.

Abstract Energy efficiency improvement will reduce the effective price of energy services, and hence at least partially mitigate original expected energy conservation. Therefore, the magnitude of rebound effect is important for the design and timing of an effective energy conservation policy. Under the framework of translog cost share equations, we estimates the direct rebound effect for heavy industry in China for the first time by conducting an empirical research on the relationship between the direct rebound effect and the ease with which energy services can substitute for other inputs. Additionally, asymmetric price responses are specified in the model for the rebound effect estimation. Empirical results in our paper indicate that the rebound effect for heavy industry in China is about 74.3%. This reveals that energy efficiency improvement can save energy to a certain degree since the rebound effect is less than 100% (“back-fire”), but most of the expected reduction in heavy industry energy consumption is mitigated. These findings prove that energy pricing reforms and energy taxes should be further implemented to achieve effective energy conservation in China’s 12th Five Years Plan.