How can we encourage consumers to buy more energy efficient cars, houses or appliances? New policy brief by Chloé Le Coq, Associate Professor at SITE, and Rebecca Ly, Research Assistant at SITE, discusses how efficiency of consumer decisions can be improved by changing governmental regulation and market incentives.
It has long been recognized that consumers fail to choose the cheapest and most efficient energy-consuming investments due to a range of market and non-market failures. This has become known as the ‘Energy Efficiency Gap’. However, there is currently a growing interest in terms of understanding on how consumers make decisions that involve an energy consumption component, and whether the efficiency of their decisions can be improved by changing the market incentives and governmental regulation. Meeting this interest, the most recent SITE Energy Talks was devoted to Demand Side Management. SITE invited Eleanor Denny, Associate Professor of Economics at Trinity College Dublin, and Natalya Volchkova, Assistant Professor at the New Economic School (NES) in Moscow and Policy Director at the Center for Economic and Financial Research (CEFIR) to discuss the Demand Side Management process. The aim of this brief is to present the principles of Demand Side Management and discuss a few implemented programs in Europe, based on the discussions during this SITE Energy Talks.