Editorial: Getting the Price Right

July/August 2007
A version of this article appears in the July/August 2007 issue of Home Energy Magazine.
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July 01, 2007
Some people claim that most of our inefficient use of energy will disappear once we “get the price right”— that is, that the price reflects the true costs of supplying that energy.  I agree that the price is important, but even when the price is right, the system may still be broken.  Here are a few examples. More than one-fourth of all refrigerators are purchased by people who will not pay for the refrigerator’s electricity bills.  That’s the fraction purchased by landlords, and by contractors for new homes.  These people have little or no interest in paying a premium for energy efficiency, because their tenants or the home buyers reap all the benefits. That’s about 2% of residential energy use, the efficiency of which is out of control. If it were not for minimum standards, tenants would almost certainly end up with guzzlers. And when the price of electricity rises, don’t expect landlords and contractors to suddenly buy more efficient models. Sitting next to many of our televisions are set-top boxes. The set-top box connects the television to a cable or satellite provider. You don’...

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