ECONOMIC BENEFITS OF ENERGY CONSERVATION

"Energy conservation" is taken to be the entire effort to shift the nation's economy from pre-1973 trends of energy use to the pattern of uses that constitute "energy thrift." The magnitude of such cost-effective conservation can be estimated from marginal rates of substitution between energy and other factors of production, in response to environmental and other increments of cost. It can be shown that conservation-oriented responses are more cost-effective than supply-expanding responses. This net cost effectiveness constitutes the economic benefit of conservation, which this paper has detailed and quantified in several dimensions of the nation's economy. The residential and commercial sectors can achieve numerous benefits by operational improvements, but efficiency-improving changes to the existing stock are much more important. Industry's benefits come through major changes in future processes. For transportation, mode shifts are the most important aspect for freight, and increased automobile efficiency is most important for passenger transport. Utility conservation arises through improved generation efficiency and more efficient use of electricity; both kinds of conservation have significant benefits. The benefits of conservation can also be characterized in terms of impacts on various aspects of the economy. The most obvious of these is the capital requirement. Both private and public outlays should be smaller with conservation, although the role of public outlays must be carefully structured to create adequate incentives in the latter case. The environmental benefits of conservation are significant; 30% conservation can mean the difference between a stable environment and a doubling of pollutants. Finally, conservation means increased labor intensiveness; this implies higher employment, but lower labor productivity, than otherwise.

  • Corporate Authors:

    Crane, Russak, and Company

    New York, NY  USA 
  • Authors:
    • Seidel, M R
  • Publication Date: 1977

Media Info

  • Features: Figures; References; Tables;
  • Pagination: p. 1-30
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00163582
  • Record Type: Publication
  • Source Agency: Energy Systems and Policy
  • Files: TRIS
  • Created Date: Mar 14 1978 12:00AM