Friday, March 27, 2015

What to make of the fierce new debate over the efficacy of California's energy codes?

I recently listened to the Freaknomics podcast, How Efficient is Energy Efficiency?.  Despite feeling relatively up-to-date on energy codes research, I was surprised to hear in that podcast about a recent paper by Arik Levinson  (Georgetown - Economics) that had previously escaped me.  Listen to the podcast here:


 Here is the podcast abstract: 

Arik Levinson is an environmental economist at Georgetown who spent some time as a senior economist for environmental issues with the Council of Economic Advisors (C.E.A.) under President Obama.

“One of my jobs,” he says, “was helping the White House evaluate the environmental policies coming out of the Department of Transportation, the Department of Energy, and the Environmental Protection Agency. And I quickly realized that most of the policies that I was seeing involved energy efficiency.”

So Levinson wanted to know: how efficient is all this energy efficiency? That’s the topic of our latest podcast. . . .

We discuss Levinson’s new working paper “How Much Energy Do Building Energy Codes Really Save? Evidence From California” (and a related Journal of Economic Behavior & Organization paper, called “California Energy Efficiency: Lessons for the Rest of the World, or Not?).

The evidence from California may surprise you: “There is no evidence,” Levinson writes, “that homes constructed since California instituted its building energy codes use less electricity today than homes built before the codes came into effect.”

That was a show-stopper for me:  anyone who has done even the most basic work on energy efficiency knows that Calfifornia's energy codes of the Seventies are routinely held up as a model for emulation.  But here is the abstract for Levinson's paper, California energy efficiency: Lessons for the rest of the world, or not?:  

Since the 1970s California’s residential electricity consumption per capita has stopped increasing while other states’ electricity use continued to grow steadily. What accounts for California’s apparent savings? Some credit the strict energy efficiency standards for buildings and appliances enacted by California in the mid-1970s. They argue that the growing gap between California and other states demonstrates that other states and countries could replicate California’s gains by adopting California-style regulations, and that California should build on its own success by tightening its 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 toward 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. Today, differences in climate and demographics account for almost 90 percent of the difference between California’s and other states’ residential electricity use. That difference thus provides no lessons for other states or countries considering adopting or tightening their own energy efficiency standards.

What is to be made of this?  What are its implications of this for those of us interested in the legal aspects of energy efficiency?  

I have found responses to Levinson's study by several groups, including NRDCEnergy Innovation, and ACEEE.  In a broad Westlaw search of all legal secondary sources, however, I turned up no hits, which makes me believe that either the legal academy has yet to address the debate or, alternatively, the slow pace of legal publishing means that responses are still in the publication process.  Does anyone out there have a link to other good responses to the Levinson paper?  Are there any good analyses of the legal issues this might implicate if Levinson is right and, alas, if he is wrong?  

Stephen R. Miller

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