Policy Inducement Effects in Energy Efficiency Technologies. An Empirical Analysis of the Residential Sector - Green Energy and Efficiency: An Economic Perspective - page 198

1 Introduction

Energy ef ciency (EE) is one of the most effective means of achieving several

goals, such as increasing energy security, fostering international cost competitive-
ness and reducing polluting emissions. In particular, achieving a more secure,
sustainable and affordable energy system is a key challenge for future world
development [ 18 , 32 , 33 ]. In this context, the availability and adoption of new
energy-efcient technologies are a key driver for reducing overall energy demand as
it in

uences the levels of EE. This aspect appears to be particularly relevant in the
residential sector, where the demand for energy to power domestic appliances and
equipment shows no sign of slowing but rather a trend of continuous growth over
the last 20 years.
Understanding the determinants of the pace of inventions in this sector therefore
appears to be an important step for the design of policies for fostering the gener-
ation and dissemination of environmental technologies aimed at increasing EE.
However, the residential sector is a complex system in which several energy ser-
vices are used, such as space heating, cooling systems, water heating systems,
lighting and several electrical appliances. This implies that major research efforts
are needed to properly map the evolution of technologies in this sector and to
systematically collect information for speci c policy strategies.

Given the limited number of studies that have analysed the drivers of innovation
in this eld, we propose a comprehensive analysis of the factors affecting the

dynamics of EE technologies in the residential sector, with speci

c attention to the
role played by public policies. In so doing, we seek to contribute to the relevant
literature: (i) by including in the analysis the domain of electrical appliances which
— account for a large proportion of residential

energy consumption in view of the great potential that comes with the multipli-
cative effect of each single appliance; (ii) by analysing the impact of the full array of
policy instruments that are assumed to in

although relatively unexplored —

uence innovation activities; and (iii) by
extending the country coverage of the empirical analysis to a large number of high-
income OECD countries.
The rest of the paper is organised as follows. Section 2 shows the consumption
patterns and the innovation dynamics in EE in the residential sector, to provide a
better understanding of the energy-growth decoupling process that has occurred in
most of OECD countries. Section 3 describes the data used for the econometric
analysis, with a particular focus on policies, and Sect. 4 sets out the empirical
strategy and presents the results of the model. Section 5 concludes with some policy
implications and further research lines.