Economists, energy efficiency practitioners need to work together for better cost/benefit studies

Recent research papers from economists that have questioned costs and benefits of energy efficiency programs and policies have been flawed, says Steve Nadel, executive director of the American Council for an Energy-Efficient Economy. 

Instead of “continuing a tit-for-tat debate,” Nadel says economists and energy efficiency practitioners could find ways to better work together to devise higher quality studies. “First, we admit that not all energy efficiency programs are stellar,” Nadel says. “It’s critical to have good evaluation to help tell what is working well and what needs improving.”

“There is a tendency, in both the economics and energy efficiency communities, to work from established paradigms and work with colleagues who share similar views,” he continues. “When the two communities meet, they often talk past each other. There is a need for both sides to better understand where the other side is coming from, and to explore opportunities to find a middle ground.”

Nadel cited recent studies that looked at only costs but not benefits, included extra costs unrelated to energy efficiency (e.g. home repair costs), left out important costs such as changes in maintenance costs, or are based on a simple cost-benefit framework without considering other goals that the programs might have. “Likewise, each program is different and one problematic program should not cast doubt on all of the others,” Nadel says.