Closing the efficiency gap: barriers to the efficient use of energy

Abstract

Only half of the potential for improving U.S. energy efficiency over the next 20 years is likely to be achieved, given current government policies and programs. This large untapped potential to save money, improve environmental quality, and reduce the foreign trade deficit exists because of structural and market barriers that inhibit adoption of cost-effective energy-efficient practices and measures. Structural barriers include distortions in fuel prices, uncertainty about future fuel prices, limited access to capital, government fiscal and regulatory policies, codes and standards, and supply infrastructure limitations. Behavioral barriers include attitudes toward energy efficiency, perceived risk of energy-efficiency investments, information gaps, and misplaced incentives.