What Changes Energy Consumption, and for How Long? New Evidence from the 2001 Brazilian Electricity Crisis

Resources for the Future Discussion Paper No. 13-06

81 Pages Posted: 27 Mar 2013

See all articles by Francois Gerard

Francois Gerard

Columbia University - Graduate School of Arts and Sciences - Department of Economics

Date Written: November 1, 2012

Abstract

There is little evidence from impact evaluation studies of ambitious residential energy conservation programs, especially in developing countries. In this paper, I investigate the short- and long-term impacts of the most ambitious electricity conservation program to date. This was an innovative program of private incentives and conservation appeals implemented by the Brazilian government in 2001-2002 in response to supply shortages of over 20%. I find that the program reduced average electricity consumption per customer by 25% over a nine-month period in affected areas. Importantly, the program reduced consumption by 12% in the long run. Such persistent effects, which arose mostly from behavioral adjustments, may substantially improve the cost-effectiveness of ambitious conservation programs. Finally, I show that a price elasticity estimated out-of-crisis would have to be increased fivefold to rationalize conservation efforts by the private incentives alone. Appeals to social preferences likely amplify consumers' responsiveness in times of crisis.

Keywords: residential energy conservation, price and non-price policies, long-term effects, developing countries

Suggested Citation

Gerard, Francois, What Changes Energy Consumption, and for How Long? New Evidence from the 2001 Brazilian Electricity Crisis (November 1, 2012). Resources for the Future Discussion Paper No. 13-06, Available at SSRN: https://ssrn.com/abstract=2239826 or http://dx.doi.org/10.2139/ssrn.2239826

Francois Gerard (Contact Author)

Columbia University - Graduate School of Arts and Sciences - Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

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