Whose Benefits Are They, Anyway? Examining the Benefits of Energy Efficiency Rules 2007 - 2014

September 3, 2015

Sofie E. Miller

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The Energy Policy and Conservation Act authorizes the Department of Energy (DOE) to establish energy efficiency standards for consumer appliances that are both technologically feasible and economically justified, while also resulting in a “significant conservation of energy.” To justify its regulations, DOE relies almost entirely on two specific types of regulatory benefits: the cost savings consumers are estimated to enjoy over the life of a more energy efficient appliance, and international benefits associated with reducing the impacts of climate change. To explore these benefits, this paper first examines the composition of benefits from energy efficiency regulations as reported by the Department of Energy over the past 10 years. It then examines arguments for and against inclusion of these benefits in regulatory impact analysis, including whether attributing large private benefits to energy efficiency rules is consistent with standard economic assumptions of consumer sovereignty, and the appropriateness of including international benefits in domestic rulemakings.