The economics of energy e$ciency: insights from voluntary participation programs


This paper reviews experience with two programs sponsored by the US Environmental Protection Agency* the Green Lights and Energy Star O$ce Products programs* that promote the adoption of energy-e$cient technologies through voluntary agreements with private sector "rms. The evidence suggests that Green Lights has induced "rms to make investments in cost-saving lighting systems that "rms failed to exploit prior to the program's implementation. Energy Star O$ce Products, in contrast, has led suppliers of computers and electronic equipment to substantially improve the energy e$ciency of their products in ways that confer net cost savings on equipment users. The paper argues that the success of these programs is based on their ability to reduce market failures related to problems of imperfect information and bounded rationality that impair the e!ectiveness of both intra-"rm organization and the coordination between equipment suppliers and their customers. Given the nature of the technologies in question, these programs should have little e!ect on the demand for energy services so that energy e$ciency improvements should lead to one-to-one reductions in the level of energy use. ( 2000 Elsevier Science Ltd. All rights reserved.

Cite this paper

@inproceedings{Howarth2000TheEO, title={The economics of energy e\$ciency: insights from voluntary participation programs}, author={Richard B. Howarth and Brent M. Haddad and Bruce Paton}, year={2000} }