decade of moderate to aggressive policy interventions could result in annual reductions in the energy
consumption in buildings of 0.1 to 1 percent. Similar conclusions are reported in Technology
Opportunities to Reduce U.S. Greenhouse Gas Emissions (the 11 Lab Study ).
, for instance,
the 11 Lab Study concluded that a vigorous RD&D program could produce significant carbon emission
reductions while sustaining economic growth.
On the other hand, critics claim that the existence of cost effective energy efficiency opportunities
(i.e., an energy efficiency gap ) has not been justified on the basis of market inefficiencies.
size that in a competitive and efficient market, suppliers produce what consumers want and are willing to pay
for. Because there is limited evidence that consumers are willing to pay for closing an energy efficiency gap,
detractors assert that the gap must not exist.
Critics also note that the existence of market failure is not a
sufficient justification for government involvement. Feasible, low cost policies must be available that can
eliminate or compensate for these failures. Some analysts argue that policies to date have not been low cost.
In addition, they argue that policies have not been adequately evaluated by measuring consumer surplus (i.e.,
the difference between how much a consumer is willing to pay for a commodity such as energy efficiency and
the amount that the consumer actually pays when a policy is implemented).
Towards a Climate Friendly