Stabilizing and then Reducing U.S. Energy Consumption: Legal and Policy Tools for Efficiency and Conservation

Abstract

Rising global demand for energy, high energy prices, climate change, and the threat of terrorism all point to the need for greater energy efficiency and conservation in the United States. While technological innovation is plainly needed, our laws and institutional arrangements must also play an important role. The United States has scores of legal and policy tools from which to choose to improve energy efficiency and curb energy consumption. This article evaluates a handful of these tools: transit-oriented development; fuel taxation; real-time pricing for electricity use; public benefit funds; improved efficiency in existing residential and commercial buildings; and expanded use of real freight. Greater efficiency and conservation based on these and other tools may allow us to stabilize U.S. energy consumption and then reduce it. As challenging as that goal might be, there is considerable evidence to believe that it is achievable.

Keywords: energy efficiency, energy conservation, energy consumption, sustainable development, climate change, stabilization wedge

JEL Classification: K32, Q30, Q41, Q01