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Environmental Economics Seminar: California Energy Efficiency Gains: Lessons for the Rest of the World, or Not?

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Date(s): March 21, 2012, 1:30 - 3 PM

Location: Room 4144, EPA West Building, 1301 Constitution Ave., NW, Washington, DC

Contact: Carl Pasurka, 202-566-2275

Presenter: Arik Levinson (Department of Economics, Georgetown University and NBER)

Description: In the early 1970s, California's energy consumption per capita began declining at almost one percent annually while other states' energy consumption plateaued. Had the rest of the country paralleled California, national energy consumption in 2009 would have been 20 percent lower -- sufficient by itself to achieve the Obama Administration’s goal of reducing greenhouse gas emissions to 17 percent below 2005 levels by 2020. Proponents of strict energy efficiency standards for buildings, appliances, and vehicles give credit for California's gains to the suite of new regulations enacted there in the mid-1970s. They argue that California should build on its success by tightening those standards further, and that other states and countries should emulate California's regulatory success. Critics point to a set of long-run trends that differentiate California from other states: a changing industrial composition, the migration of populations towards warmer climates of the South and West, and the evolving demographics of households. Each trend alters energy demand even in the absence of efficiency regulations, and in theory could account for all of California's savings. This paper examines each critical explanation in turn to ask how much of those overall savings can be explained by the long run trends, thereby offering no lessons for the rest of the world.

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