Measurement of energy efficiency based on economic foundations

  • Focus Area -
  • Type KAPSARC journal article
  • Date 1 December 2015
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Abstract

Energy efficiency policy is seen as a very important activity by almost all policy makers. In practical energy policy analysis, the typical indicator used as a proxy for energy efficiency is energy intensity. However, this simple indicator is not necessarily an accurate measure given changes in energy intensity are a function of changes in several factors as well as ‘true’ energy efficiency; hence, it is difficult to make conclusions for energy policy based upon simple energy intensity measures. Related to this, some published academic papers over the last few years have attempted to use empirical methods to measure the efficient use of energy based on the economic theory of production. However, these studies do not generally provide a systematic discussion of the theoretical basis nor the possible parametric empirical approaches that are available for estimating the level of energy efficiency. The objective of this paper, therefore, is to sketch out and explain from an economic perspective the theoretical framework as well as the empirical methods for measuring the level of energy efficiency. Additionally, in the second part of the paper, some of the empirical studies that have attempted to measure energy efficiency using such an economics approach are summarized and discussed. © 2015 Elsevier B.V.

http://dx.doi.org/10.1016/j.eneco.2015.08.023

Energy Economics

Authors

Lester C. Hunt

Lester C. Hunt

Visiting Researcher Lester C. Hunt is a part-time Professor of Economics at the University of Portsmouth and a KAPSARC Visiting Researcher. Lester… Lester C. Hunt is a part-time Professor of Economics at the University of Portsmouth and a KAPSARC Visiting Researcher. Lester previously worked at the Universities of Essex (1979-1980), Swansea (1980-1985 and 1987-1989), Surrey (1989-1991 and 1999-2017), and Portsmouth (1994-1998, and 2017 onwards). At Surrey he was Head of Economics (1999-2003) and Director of SEEC (2003-2015). At Portsmouth he was Head of Economics (1996 -1998) and Head of Economics and Finance (2017-2021). In addition to working in higher education, Lester was an Economic Adviser in the forecasting division of HM Treasury (1985-1987), an Energy Analyst/Economist at Midlands Electricity (1991-1994) and a Senior Research Fellow at KAPSARC (2015-2017). Lester holds a B.Sc. (Hons) in Economics with Econometrics from Loughborough University, an MA in Economics from the University of Essex, and a Ph.D. in Economics from the University of Surrey. He has been an Editor of The Energy Journal since 2006.

Expertise

  • Energy Economics and Policy

Publications See all Lester C. Hunt’s publications

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