Monday, August 5, 2013

Deconstructing the Rosenfeld Curve

Some support for my skepticism of conservation claims, and from the the excellent Energy Economics Exchange site of the Energy Institute at Haas (University of California at Berkeley Haas School of Business).

Deconstructing the Rosenfeld Curve | Energy Economics Exchange:
The Wall Street Journal, Forbes, and, most recently, the Sacramento Bee have pieces on Arik Levinson’s new NBER working paper, “California Energy Efficiency: Lessons for the Rest of the World, or Not?” The paper makes a nice point, but I worry that it is being misinterpreted.

Figure 3.2 from Ontario's Chief Energy Conservation Officer's Annual Report 2008
The chart basically adds Canada and Ontario to Rosenthall Curve
While some have attributed the difference to California’s energy-efficiency policies, Levinson argues that California’s temperate climate, changing demographics, and other factors can explain almost 90% of the gap. For example, Levinson shows that part of the explanation for the increase in other U.S. states is that more and more people are living in the Southwest, where air-conditioning is used more intensively.

Levinson’s paper is thoughtfully done and deserves to be widely read, but the results are not terribly surprising. Even energy-efficiency proponents have long understood that at least half of the gap is likely due to non-policy factors"
Read the entire article at Energy Economics Exchange

Here is the blurb introducing the Arik Levinson paper discussed in the Energy Economics Exchange post:
Starting in the 1970s California's residential electricity consumption per capita stopped increasing, while other states' electricity use continued to grow steadily. Similar patterns can be seen in non-electric energy, industry, and transportation. What accounts for California's apparent energy savings? Some credit the strict energy efficiency standards for buildings and appliances enacted by California in the mid-1970s. They argue that other states and countries could replicate California's gains, and that California should build on its own success by tightening those standards further. Skeptics might point to three long-run trends that differentiate California's electricity demand from other states: (1) shifting of the U.S. population towards warmer climates of the South and West; (2) relatively small income elasticity of energy demand in California's temperate climate; and (3) evolving differences between the demographics of households in California and other states. Together, these trends account for around 90 percent of California's apparent residential electricity savings, thus providing no lessons for other states or countries considering adopting or tightening their energy efficiency standards.

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