Jessoe, Katrina, and David Rapson. 2014. "Knowledge Is (Less) Power: Experimental Evidence from Residential Energy Use." American Economic Review, 104(4): 1417-38.
Imperfect information about product attributes inhibits efficiency in many choice settings, but can be overcome by providing simple, lowcost information. We use a randomized control trial to test the effect of high-frequency information about residential electricity usage on the price elasticity of demand. Informed households are three standard deviations more responsive to temporary price increases, an effect that is not attributable to price salience. Conservation extends beyond pricing events in the short and medium run, providing evidence of habit formation and implying that the intervention leads to greenhouse gas abatement. Survey evidence suggests that information facilitates learning.
What do recent developments in Iraq imply for the price U.S. motorists should expect to pay for gasoline?
For the last two years I’ve been using a simple summary of the long-run relation (sometimes described as a “cointegrating relation”) between the U.S. retail price of gasoline and the price of crude oil. The relation implies that a $10 increase in the price of a barrel of Brent crude oil is typically associated with a 25 cent increase in the average U.S. retail price of a gallon of gasoline. The relation only captures the long-run tendency, and leaves out seasonal factors that for example brought the price of gasoline temporarily lower this last winter. But since this spring U.S. gasoline prices have moved back in line with what you’d expect given the long-run fundamentals.
Average retail price of U.S. gasoline (black) and price predicted on the basis of price of Brent crude oil (blue). Black: average U.S. price of retail gasoline, all formulations, in dollars per gallon, weekly Jan 10, 2000 to June 16, 2014 (data source: EIA). Blue: 0.84 plus 0.025 times price of Brent, in dollars per barrel, weekly Jan 7, 2000 to Jun 13, 2014 (data source: EIA).
Here’s a little calculator courtesy of Political Calculations that you can use to get the predicted gasoline price plotted in blue in the graph above. Just enter the current price of Brent to see the implied long-run gasoline price. ...
Ohio is leading a group of drilling states working with seismology experts at energy companies, government agencies and universities across the U.S. on how best to detect and regulate human-induced earthquakes.
How do you regulate an earthquake?
The initiative follows Ohio's discovery in April of a probable link between the drilling practice called hydraulic fracturing, or fracking, and five small tremors in eastern Ohio, a first in the Northeast. In 2012, Gov. John Kasich (KAY'-sik) halted disposal of fracking wastewater surrounding a well site nearby after a series of earthquakes later tied to a deep-injection well.
Ohio Oil & Gas Chief Rick Simmers tells The Associated Press state regulators seek up-to-date information in developing appropriate detection procedures and regulatory practices.
How about stand nearby and if the ground starts shaking, well, you've detected an earthquake.
One environmentalist, Teresa Mills, says ending fracking is the most effective way to halt the quakes.
The California Legislature is looking at a voluntary program that would tax motorists for every mile they drive.
KCAL9’s Bobby Kaple reports that Sen. Mark DeSaulnier, D-Concord, introduced a bill to test out the vehicle miles traveled (VMT) tax because the state’s gas tax was no longer bringing in the revenue it used to due to people driving more fuel efficient vehicles.
It's been almost exactly 7 years now (May 8, 2007) and people still aren't listening to me.
Taxing miles creates perverse incentives for fuel efficiency. A $0.015/mile tax (the size of the tax mentioned in the article) is the equivalent of a $0.015 * X tax per gallon where X is mpg. In words, a mileage tax increases the tax per gallon the more fuel efficient the car. Now granted, with higher mpg you use fewer gallons to drive an equivalent number of miles, and in the end, everyone driving 100 miles will pay the same tax. And from a revenue perspective, that might be OK. But there might be a way to kill fewer birds with one stone.
As I have written a number of times, a more straightforward proposal is to simply raise the gas tax. Reaising the gas tax accomplishes a number of things 1) It raises revenue, 2) It discourages miles driven, and 3) It increases the incentive for higher fuel efficiency.
Because my previous posts on this have been written with an ironic twist (I propose a mileage tax that is inversely proportional to fuel efficiency and then show that such a tax is the equivalent of a $1/gallon gas tax), here's the direct, non-ironic version: A $1/gallon gas tax...
...places a higher burden on those driving less fuel efficient vehicles--that should satisfy those blaming the SUV drivers for all of the problems*.
...places a higher burden on those driving more. By increasing the marginal cost per mile driven, total miles driven should decrease.
...assuming fuel efficiency and income are negatively correlated--that is, the rich tend to drive larger, more expensive, less fuel efficient cars--[higher gas taxes] place a higher burden on higher incomes.
...provides an incentive for drivers to switch to more fuel efficient vehicles.
It's really simple. Why worry about complicated milage programs? The gas tax infrastructure is in place. Raise the gas tax and meet multiple public policy and economic goals simultaneously.
So a sample of my complaints: She trumpets the fast declining price of solar panels by picking a factoid out of a story in ComputerWorld: “declined an estimated 60 percent since the beginning of 2011!” ComputerWorld? Maybe the work of the U.S. Department of Energy or other more traditional information sources wasn’t sensational enough (claiming as it does, merely that ”U.S. solar industry is more than 60 percent of the way to achieving cost-competitive utility-scale solar photovoltaic electricity”).
An investment company would have to acknowledge that cherry-picked past results are no guarantee of future performance, but it isn’t even clear that she is firm on the idea of “cost.” Folbre declares that generous subsidies and feed-in tariffs have “allowed solar photovoltaics to achieve vastly lower unit costs.” Really? Well maybe if we subsidize it a little harder, it will become free for everyone!
C’mon professor, get serious! Perhaps it is true that generous subsidies and feed-in tariffs have allowed owners of solar PV systems to experience lower out-of-pocket expenses, but it is a little embarrassing to see a distinguished economist make this mistake about costs. Should we conclude congressional junkets overseas don’t cost anything because the government foots the bill?
Federal environmental officials now estimate more than 20,000 gallons of crude oil — double the initial estimates — leaked from a pipeline into a nature preserve in southwest Ohio.
The 374-acre nature preserve in suburban Colerain Township is part of the Great Parks of Hamilton County system. Wildlife officials say animals including crawfish, salamanders and frogs have been affected by the oil, with a few found dead at the scene. Contaminated animals are being collected, cleaned and released, officials said, adding that colder weather, with freezing temperatures at night, has reduced the number of wildlife moving through the leak area.
If the faces of renewable energy critics are not red yet, they soon will be. For years, these critics — of solar photovoltaics in particular — have called renewable energy a boutique fantasy. A recent Wall Street Journal blog post continues the trend, asserting that solar subsidies take money from the poor to benefit the rich.
But solar-generated electricity is turning into a powerful environmental and economic success story. It’s also threatening the balance sheets of electric utility companies that continue to rely heavily on fossil fuels and nuclear energy.
As their costs per kilowatt hour have fallen through the floor, solar arrays have hit the rooftops.
The average price of a solar panel has declined an estimated 60 percent since the beginning of 2011, and this year the total photovoltaic capacity in the United States is projected to reach 10 gigawatts, the energy equivalent of several nuclear power plants. (By one estimate, photovoltaic costs crossed over to become cheaper than electricity generated by new nuclear plants about four years ago.)
An analysis of remodeling and construction permit data from 77 municipalities around the United States reveals that solar installations — primarily photovoltaic rather than solar thermal — grew by a third last year alone. With a relatively short payback period, these home-improvement investments are now within the reach of many middle-class families.
We learned something really surprising about the wind energy industry from President Obama's FY2015 budget proposal. He doesn't believe that the industry will ever be capable of economically sustaining itself.
Here's how we know. Tucked away within the proposal, President Obama is proposing making the wind energy production tax credit permanent.
Mr. Obama’s budget would permanently extend the production tax credit for wind electricity, which expired last year after Congress failed to pass a bill renewing it. Over the next 10 years, the tax credit would cost $19.2 billion, according to the budget plan.
Senate Finance Chairman Ron Wyden (D., Ore.) has indicated he wants to pass a bill extending this tax credit and other temporary ones. But it’s unclear whether he has enough support to pass it in the full Senate, and the House seems even less likely to support such a proposal.
Originally established in 1992, the wind energy production tax credit has had a lot to do with fueling the growth of the nation's wind energy generating capacity since its inception. ...
[snip the analysis]
... From 2000 through 2012, what we find is that wind energy delivered anywhere from 18% to 29% of its installed capacity, demonstrating a considerable degree of unreliability for utility consumers compared to other methods of generating power. Going by the wind energy industry's own claims, instead of powering the equivalent of 15 million American homes, it's actually only powering enough power for somewhere between 2.7 and 4.35 million of them.
"This blog aims to look at more of the microeconomic ideas that can be used toward environmental ends. Bringing to bear a large quantity of external sources and articles, this blog presents a clear vision of what economic environmentalism can be."
Don't believe what they're saying
And allow me a quick moment to gush: ... The env-econ.net blog was more or less a lifeline in that period of my life, as it was one of the few ways I stayed plugged into the env. econ scene. -- Anonymous
... the Environmental Economics blog ... is now the default homepage on my browser (but then again, I guess I am a wonk -- a word I learned on the E.E. blog). That is a very nice service to the profession. -- Anonymous
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