Demand-Side Technology Standards Under Inefficient Pricing Regimes

摘要: When price-setting regulators haveobjectives other than maximizing socialsurplus, the conservation potential ofdemand-side technology standards can besignificantly diminished. This paperdemonstrates this by empirically recovering thesocially sub-optimal preferences of a group ofwater managers in groundwater-dependentregion California and simulating theirinefficient price response to mandatedadoption low-flow appliances homeowners. The resulting reduction conservationpotential these is quantified,and modest tax shown be relativelycost-effective policy tool for conservation. If non-price policies arepreferred according equity criteria, thepaper suggests that, order preserve theirconservation potential, policy-makers should berequired continue set prices as if notechnology had been introduced.