California energy efficiency: Lessons for the rest of the world, or not?

Abstract

Since the 1970s California's residential electricity consumption per capita has stopped increasing while other states’ electricity use continued to grow steadily. What accounts for California's apparent savings? Some credit the strict energy efficiency standards for buildings and appliances enacted by California in the mid-1970s. They argue that the growing gap between California and other states demonstrates that other states and countries could replicate California's gains by adopting California-style regulations, and that California should build on its own success by tightening its standards further. Skeptics might point to three long-run trends that differentiate California's electricity demand from other states: (1) shifting of the U.S. population toward warmer climates of the South and West; (2) relatively small income elasticity of energy demand in California's temperate climate; and (3) evolving differences between the demographics of households in California and other states. Today, differences in climate and demographics account for almost 90 percent of the difference between California's and other states’ residential electricity use. That difference thus provides no lessons for other states or countries considering adopting or tightening their own energy efficiency standards.