Energy Conservation Strategies



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United States Environmental Protection Agency Office of Research and Monitoring


This report examines various strategies for reducing national energy demand. Suppose government chooses to reduce national energy use, and to do so in a cost-effective way. Then it is necessary to find out, for each potential energy saving, how much energy is involved and how costly the alternatives would be. The study begins by asking how much is now paid, or might be paid in the future, by various energy users. It emerges from the study that many users get much of their energy at relatively low prices, and are thus encouraged to waste it; the economist calls this "price distortion", a form of "market failure." The study analyzes the kinds of market failure which seem to cause the present "energy crisis", the kinds of government action which could rectify these failures, and the likely response of the economy to moderate price increases. Numerous actions, some large and some small, would be required to restore a more efficient functioning of the market for energy. Some of these actions have already been initiated. In an efficient market, energy price increases of 25% would prompt a halving of the growth of energy demand; through 1990, energy needs would grow 40% rather than the 100% projected at current prices.


114 pages


energy usage, energy consumption, natural resources conservation