Energy Efficiency

Chapter 5

Is There an Energy Efficiency Gap?

Hunt Allcott¹ and Michael Greenstone², ¹New York University, ²Massachusetts Institute of Technology

1 Introduction

Many analysts of the energy industry have long believed that energy efficiency offers an enormous “win-win” opportunity: through aggressive energy conservation policies, we can both save money and reduce negative externalities associated with energy use. In 1979, Pulitzer Prize-winning author Daniel Yergin and the Harvard Business School Energy Project made an early version of this argument in the book Energy Future:

If the United States were to make a serious commitment to conservation, it might well consume 30 to 40 percent less energy than it now does, and still enjoy the same or an even ...