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Markets for Energy Efficiency

In this report, the Energy Modeling Forum at Stanford University studies the issue of energy conservation, specifically, analyzing how much energy savings can be achieved through various policies, and at what cost. Meetings of the EMF have constituted, perhaps, a microcosm of the more general debate. While initially focused upon technical comparisons of different models' treatments of energy conservation, they have become the scene of protracted and sometimes heated discussions of fundamental issues and first principles. These interchanges as well as those in the IAEE meetings have revealed clearly that disputes over the 'efficiency gap' are a complex mix of theoretical, empirical, methodological and in some cases ideological disagreements. What has emerged from these meetings, however, is a possibly unprecedented interest among many participants in sharpening and, perhaps, resolving the debate, and in searching for the ever elusive “middle ground”.  These papers do not exhaust the list of issues surrounding the ‘market failures’ controversy, nor do they resolve them.  But the papers do suggest that there is likely to be a middle ground where economists and technologists agree that there are some market failures for energy efficiency.  More important, several of the papers suggest critical empirical test of the proposition that there are market failures, and that there is certainly scope for evaluation attempts to remove or offset these market failures through market interventions.  We hope that this issue leads to more, not less, debate on the subject and more careful analysis of how people use energy.  To access or purchase this journal, click here.