Biased Thinking about the “Energy Efficiency Gap”

Ethical Markets Resource Efficiency

“Is There an Energy Efficiency Gap?” is the title of a recent article by Hunt Allcott and Michael Greenstone published in the Journal of Economic Perspectives. In the article, Allcott and Greenstone examine energy efficiency and specifically “whether there are investment inefficiencies that a policy would correct.” They conclude that “the available evidence from empirical analyses of weatherization, demand-side management programs, automobile and appliance markets, the “landlord-tenant” agency problem, and information elicitation suggests that while investment inefficiencies do appear in various settings, the actual magnitude of the Energy Efficiency Gap is small relative to the assessments from engineering analyses.”


ACEEE has just released a white paper examining their arguments. We find that while the authors have a few useful insights, in general they selectively mine available data to make their points, ignoring other important findings in the various articles they cite…


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