 Order a Publication | |
hort Summary
Many economists argue that standard techniques of engineering- economics have been inappropriately used to assess the performance of the market for energy efficiency. Taking account of such criticisms, we describe in this paper an engineering-economic approach to identifying imperfections in this market and justifying policy interventions therein. Using this approach we examine energy-efficient magnetic ballasts, a cost- effective technology that was remarkably slow to be adopted in the marketplace. We conclude that the under-adoption of efficient magnetic ballasts is a strong indicator of economic inefficiency in the market. In this case, the imposition of minimum efficiency standards for ballasts resulted in net economic benefits to ballast users and to society.