IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v70y2018icp421-428.html
   My bibliography  Save this article

Energy efficiency investments in small and medium sized manufacturing firms: The case of California energy crisis

Author

Listed:
  • Uz, Dilek

Abstract

This paper investigates the effect of the 2000 California energy crisis on the take up of an engineering audit program funded by the Department of Energy, aiming operational improvements in various domains, including energy efficiency, at small and medium sized firms. Using a publicly available data set containing detailed information on both firm characteristics and the specifics of the recommendations made, a linear probability model is estimated using difference-in-difference strategy. In order to keep the treatment and the control groups as comparable as possible for ensuring credible identification, the firms that applied to be audited and made the take up decision before the crisis are compared to those that applied right before the crisis and had to decide after the crisis started. The results show that the 2000 California energy crisis was associated with about a 15% increase in the take up of the IAC energy efficiency recommendations. The coefficient estimate is statistically significant and robust to different model specifications.

Suggested Citation

  • Uz, Dilek, 2018. "Energy efficiency investments in small and medium sized manufacturing firms: The case of California energy crisis," Energy Economics, Elsevier, vol. 70(C), pages 421-428.
    • Handle: RePEc:eee:eneeco:v:70:y:2018:i:c:p:421-428
    DOI: 10.1016/j.eneco.2017.12.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988317304267
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2017.12.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anderson, Soren T. & Newell, Richard G., 2004. "Information programs for technology adoption: the case of energy-efficiency audits," Resource and Energy Economics, Elsevier, vol. 26(1), pages 27-50, March.
    2. Stephen J. Decanio & William E. Watkins, 1998. "Investment In Energy Efficiency: Do The Characteristics Of Firms Matter?," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 95-107, February.
    3. de Groot, Henri L. F. & Verhoef, Erik T. & Nijkamp, Peter, 2001. "Energy saving by firms: decision-making, barriers and policies," Energy Economics, Elsevier, vol. 23(6), pages 717-740, November.
    4. Tonn, Bruce & Martin, Michaela, 2000. "Industrial energy efficiency decision making," Energy Policy, Elsevier, vol. 28(12), pages 831-843, October.
    5. Joshua Linn, 2008. "Energy Prices and the Adoption of Energy-Saving Technology," Economic Journal, Royal Economic Society, vol. 118(533), pages 1986-2012, November.
    6. Paul L. Joskow, 2001. "California's Electricity Crisis," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 17(3), pages 365-388.
    7. Sanstad, Alan H & Blumstein, Carl & Stoft, Steven E, 1995. "How high are option values in energy-efficiency investments?," Energy Policy, Elsevier, vol. 23(9), pages 739-743, September.
    8. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, January.
    9. Kevin A. Hassett & Gilbert E. Metcalf, 1992. "Energy Tax Credits and Residential Conservation Investment," NBER Working Papers 4020, National Bureau of Economic Research, Inc.
    10. Leahy, John V & Whited, Toni M, 1996. "The Effect of Uncertainty on Investment: Some Stylized Facts," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(1), pages 64-83, February.
    11. Noailly, Joëlle, 2012. "Improving the energy efficiency of buildings: The impact of environmental policy on technological innovation," Energy Economics, Elsevier, vol. 34(3), pages 795-806.
    12. Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
    13. Scott, Michael J. & Roop, Joseph M. & Schultz, Robert W. & Anderson, David M. & Cort, Katherine A., 2008. "The impact of DOE building technology energy efficiency programs on U.S. employment, income, and investment," Energy Economics, Elsevier, vol. 30(5), pages 2283-2301, September.
    14. Peter C. Reiss & Matthew W. White, 2008. "What changes energy consumption? Prices and public pressures," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 636-663, September.
    15. Train, Kenneth, 1985. "Discount rates in consumers' energy-related decisions: A review of the literature," Energy, Elsevier, vol. 10(12), pages 1243-1253.
    16. Wolak, Frank A., 2003. "Diagnosing the California Electricity Crisis," The Electricity Journal, Elsevier, vol. 16(7), pages 11-37.
    17. Severin Borenstein, 2002. "The Trouble With Electricity Markets: Understanding California's Restructuring Disaster," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 191-211, Winter.
    18. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy-efficiency gap What does it mean?," Energy Policy, Elsevier, vol. 22(10), pages 804-810, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Isabel Andrade & Johann Land & Patricio Gallardo & Susan Krumdieck, 2022. "Application of the InTIME Methodology for the Transition of Office Buildings to Low Carbon—A Case Study," Sustainability, MDPI, vol. 14(19), pages 1-17, September.
    2. Guoping Ding & Jingqian Hua & Juntao Duan & Sixia Deng & Wenyu Zhang & Yifan Gong & Huaping Sun, 2022. "Research on the Strategy of Industrial Structure Optimization Driven by Green Credit Distribution," Sustainability, MDPI, vol. 14(15), pages 1-17, July.
    3. Yu-Ling Hsiao, Cody & Wei, Xinyang & Sheng, Ni & Shao, Chengwu, 2021. "A joint test of policy contagion with application to the solar sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    4. Hsiao, Cody Yu-Ling & Chen, Hsing Hung, 2018. "The contagious effects on economic development after resuming construction policy for nuclear power plants in Coastal China," Energy, Elsevier, vol. 152(C), pages 291-302.
    5. Evgeny Lisin & Galina Kurdiukova & Pavel Okley & Veronika Chernova, 2019. "Efficient Methods of Market Pricing in Power Industry within the Context of System Integration of Renewable Energy Sources," Energies, MDPI, vol. 12(17), pages 1-16, August.
    6. Chang, Kai & Wan, Qiong & Lou, Qichun & Chen, Yili & Wang, Weihong, 2020. "Green fiscal policy and firms’ investment efficiency: New insights into firm-level panel data from the renewable energy industry in China," Renewable Energy, Elsevier, vol. 151(C), pages 589-597.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert Stavins & Judson Jaffe & Todd Schatzki, 2007. "Too Good to Be True? An Examination of Three Economic Assessments of California Climate Change Policy," NBER Working Papers 13587, National Bureau of Economic Research, Inc.
    2. Stavins, Robert N. & Jaffe, Judson & Schatzki, Todd, 2007. "Too Good to Be True? Three Economic Assessments of California Climate Change Policy," RFF Working Paper Series dp-07-12, Resources for the Future.
    3. Häckel, Björn & Pfosser, Stefan & Tränkler, Timm, 2017. "Explaining the energy efficiency gap - Expected Utility Theory versus Cumulative Prospect Theory," Energy Policy, Elsevier, vol. 111(C), pages 414-426.
    4. Anderson, Soren T. & Newell, Richard G., 2004. "Information programs for technology adoption: the case of energy-efficiency audits," Resource and Energy Economics, Elsevier, vol. 26(1), pages 27-50, March.
    5. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    6. Richard G. Newell & Juha Siikamäki, 2014. "Nudging Energy Efficiency Behavior: The Role of Information Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 555-598.
    7. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    8. Aida Sa & Patrik Thollander & Majid Rafiee, 2018. "Industrial Energy Management Systems and Energy-Related Decision-Making," Energies, MDPI, vol. 11(10), pages 1-12, October.
    9. Popp, David & Newell, Richard G. & Jaffe, Adam B., 2010. "Energy, the Environment, and Technological Change," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 873-937, Elsevier.
    10. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Working Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.
    11. Martin, Ralf & Muûls, Mirabelle & de Preux, Laure B. & Wagner, Ulrich J., 2012. "Anatomy of a paradox: Management practices, organizational structure and energy efficiency," Journal of Environmental Economics and Management, Elsevier, vol. 63(2), pages 208-223.
    12. Heather Klemick & Elizabeth Kopits & Keith Sargent & Ann Wolverton, 2014. "Heavy-Duty Trucks and the Energy Efficiency Paradox," NCEE Working Paper Series 201402, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jan 2014.
    13. Ward, David O. & Clark, Christopher D. & Jensen, Kimberly L. & Yen, Steven T. & Russell, Clifford S., 2011. "Factors influencing willingness-to-pay for the ENERGY STAR® label," Energy Policy, Elsevier, vol. 39(3), pages 1450-1458, March.
    14. Henriksson, Eva & Söderholm, Patrik & Wårell, Linda, 2012. "Industrial electricity demand and energy efficiency policy: The role of price changes and private R&D in the Swedish pulp and paper industry," Energy Policy, Elsevier, vol. 47(C), pages 437-446.
    15. Stefanie Heinzle, 2012. "Disclosure of Energy Operating Cost Information: A Silver Bullet for Overcoming the Energy-Efficiency Gap?," Journal of Consumer Policy, Springer, vol. 35(1), pages 43-64, March.
    16. Fleiter, Tobias & Schleich, Joachim & Ravivanpong, Ployplearn, 2012. "Adoption of energy-efficiency measures in SMEs—An empirical analysis based on energy audit data from Germany," Energy Policy, Elsevier, vol. 51(C), pages 863-875.
    17. Isamu Matsukawa, 2005. "The Benefits of Information on the Efficient Usage of Consumer Durables," Others 0501005, University Library of Munich, Germany.
    18. Mette Talseth Solnørdal & Lene Foss, 2018. "Closing the Energy Efficiency Gap—A Systematic Review of Empirical Articles on Drivers to Energy Efficiency in Manufacturing Firms," Energies, MDPI, vol. 11(3), pages 1-30, February.
    19. Costa-Campi, María Teresa & García-Quevedo, José & Segarra, Agustí, 2015. "Energy efficiency determinants: An empirical analysis of Spanish innovative firms," Energy Policy, Elsevier, vol. 83(C), pages 229-239.
    20. Costa-Campi, María Teresa & García-Quevedo, José & Segarra, Agustí, 2015. "Energy efficiency determinants: An empirical analysis of Spanish innovative firms," Energy Policy, Elsevier, vol. 83(C), pages 229-239.

    More about this item

    Keywords

    Energy efficiency; Manufacturing firms; California energy crisis;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • H8 - Public Economics - - Miscellaneous Issues
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:70:y:2018:i:c:p:421-428. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.