ABSTRACT
In this chapter, the authors examine some of the major issues associated with the allocation of energy resources over time and explore how economic analysis can clarify their understanding of both the sources of the problems and their solutions. The United States depends on both renewable portfolio standards, and a suite of production and investment tax credits to promote renewable resources that reduce carbon emissions. The role for energy efficiency in the broader mix of energy polices depends, of course, on how large the opportunity is. In an owner-occupied unit, the owner bears all the costs and receives all the benefits from an investment in energy efficiency. An energy tax also would fail to produce a fully efficient resolution for climate impacts since it would focus on energy per se, not the actual emissions emitted by that energy use, a factor that varies widely among fuels.
