ABSTRACT
Conservation is considered to be an important source of future energy, for example, in the International Energy Agency (2013), due to a claimed efficiency gap resulting from distorted consumer decisions. This claim led to many proposals and the EU’s politicians being ‘committed’ to a 20% reduction in energy consumption. This paper departs from Nordhaus (1973), but focuses on this specific source of energy conservation and draws attention to other characteristics of Nordhaus’ work. First, whether an ‘energy efficiency gap’ exists and whether it can be attributed to consumers discounting too high (compare Nordhaus’ (2007) review of Stern (2007)). Second, if existing, how can one correct and what are the obstacles. Third, limits of politics (compare Nordhaus (1991)).
