Energy Efficiency - Market Response
There's an interesting article in this week's Economist about energy efficiency. Most of the most egregious causes of poor energy efficiency are government subsidies and regulations.
The article also talks about how many businesses and consumers seem not to bother to adopt energy saving devices unless there is a very high return on their use. They cite the transaction costs of researching, purchasing and installing these energy saving devices as one of the main causes of this failure . This of course presents a profit opportunity. Companies have sprung up that take care of financing and talling energy saving devices. These companies split the energy savings with their clients.
If only the various Australian water boards learnt that lesson and raised the price of water instead of instituting the ridiculous water restrictions that they use to limit demand.
The article also talks about how many businesses and consumers seem not to bother to adopt energy saving devices unless there is a very high return on their use. They cite the transaction costs of researching, purchasing and installing these energy saving devices as one of the main causes of this failure . This of course presents a profit opportunity. Companies have sprung up that take care of financing and talling energy saving devices. These companies split the energy savings with their clients.
If only the various Australian water boards learnt that lesson and raised the price of water instead of instituting the ridiculous water restrictions that they use to limit demand.
posted by Hamish at 2:29 PM
3 Comments:
I read that if the cost of creating and controlling the water restrictions in NSW (currently paid by our taxes) was absorbed into our water rates, the price per litre would double. The article went on to suggest would result in about the desired level of water use. Then the only question is around equitable distribution.
Are you saying that the price of water would have to double in order to hold demand back to the current level (without water restrictions)? Or are you saying that incorporating the cost of policing the water restrictions would the cost of water?
I would be very surprised if the price had to double in order to achieve the same water savings but I'm no expert...
I think you could give every household some kind of minimum amount of water before the higher prices kick in if you really thought that changes in the rates would really adversely effect poorer people.
I can't find the source, but I think it was saying both. Currently a lot of funds go into setting and policing the water restrictions. If this cost was absorbed into water rates the price would double. And the article said this would have similar effects to to the water restrictions, but giving people who want to pay more options.
Post a Comment
<< Home