Electrification is a centerpiece of global decarbonization efforts. Yet there are reasons to be s... more Electrification is a centerpiece of global decarbonization efforts. Yet there are reasons to be skeptical of the inevitability, or at least the optimal pace, of the transition. We discuss several under-appreciated costs of full, or even deep, electrification. Consumer preferences can operate in favor of and in opposition to electrification goals; and electrification is likely to encounter physical and economic obstacles when it reaches some as-yet-unknown level. While we readily acknowledge the external benefits of decarbonization, we also explore several under-appreciated external costs. The credibility and eventual success of decarbonization efforts is enhanced by foreseeing and ideally avoiding predictable but non-obvious costs of promising abatement pathways. Thus, even with all of its promise, the degree of electrification may ultimately reach a limit. * We thank Lutz Kilian and Kunal Patel for helpful comments, and Reid Taylor and Jessica Lyu for excellent research assistance. All opinions and errors are our own. The views expressed here are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System. The order in which the authors' names appear has been randomized using the AEA Author Randomization Tool (ntsoJeCwKuS), denoted by ⓡ.
This paper quantifies a tenant-side "split incentives" problem that exists when the largest comme... more This paper quantifies a tenant-side "split incentives" problem that exists when the largest commercial sector customers are on electricity-included property lease contracts, causing them to face a marginal electricity price of zero. We use exogenous variation in weather shocks to show that the largest firms on tenant-paid contracts use up to 14 percent less electricity in response to summer temperature fluctuations. The result is retrieved under weaker identifying assumptions than previous split incentives papers, and is robust when exposed to several opportunities to fail. The electricity reduction in response to temperature increases is likely to be a lower bound when generalized nationwide and suggests that policymakers should consider a sub-metering policy to expose the largest commercial tenants to the prevailing retail electricity price.
for excellent research assistance; and many seminar participants. The views expressed herein are ... more for excellent research assistance; and many seminar participants. The views expressed herein are those of the authors and do not necessarily reflect the views of the California Air Resources Board or the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
Environmental and energy policy and the economy, 2022
The authors declare that they have no relevant or material financial interests that relate to the... more The authors declare that they have no relevant or material financial interests that relate to the research described in this paper. We thank Joshua Linn and Resources for the Future for providing access to data and computing. We gratefully thank Reid Taylor for excellent research assistance, and the editors of this volume for their helpful comments and suggestions on early versions of the paper. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
This paper presents experimental evidence that information feedback dramatically increases the pr... more This paper presents experimental evidence that information feedback dramatically increases the price elasticity of demand in a setting where signals about quantity consumed are traditionally coarse and infrequent. In a randomized controlled trial, residential electricity customers are exposed to price increases, with some households also receiving displays that transmit high-frequency information about usage and prices. This substantially lowers information acquisition costs and allows us to identify the marginal information effect. Households only experiencing price increases reduce demand by 0 to 7 percent whereas those also exposed to information feedback exhibit a usage reduction of 8 to 22 percent, depending on the amount of advance notice. The differential response across treatments is significant and robust to the awareness of price changes. Conservation extends beyond the treatment window, providing evidence of habit formation, spillovers, and greenhouse gas abatement. Results suggest that information about the quantity consumed facilitates learning, which likely drives the treatment differential.
Review of Environmental Economics and Policy, 2016
Discussion papers are research materials circulated by their authors for purposes of information ... more Discussion papers are research materials circulated by their authors for purposes of information and discussion. They have not necessarily undergone formal peer review.
Journal of the Association of Environmental and Resource Economists, 2023
Transportation electrification is viewed by many as a cornerstone for climate change mitigation, ... more Transportation electrification is viewed by many as a cornerstone for climate change mitigation, with the ultimate vision to phase out conventional vehicles entirely. In a world with only electric vehicles (EVs), transportation pollution would be primarily determined by the electricity grid composition. For the foreseeable future, however, environmental benefits of EVs must be measured relative to the (likely gasoline) car that would have been bought instead. This so-called "counterfactual" vehicle cannot be observed, but its fuel economy can be estimated. A quasiexperiment in California allows us to show that subsidized buyers of EVs would have, on average, purchased relatively fuel-efficient cars had they not gone electric. The actual incremental pollution abatement arising from EVs today is thus substantially smaller than one would predict using the fleet average as the counterfactual vehicle. We discuss implications for climate policy and how to accurately reflect EV choice in integrated assessment models.
The authors declare that they have no relevant or material financial interests that relate to the... more The authors declare that they have no relevant or material financial interests that relate to the research described in this paper. We thank Severin Borenstein, Jim Bushnell, Ken Gillingham, Joseph Shapiro, two anonymous referees and many seminar participants for their helpful comments. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
The rapid electrification of the transportation fleet in California raises important questions ab... more The rapid electrification of the transportation fleet in California raises important questions about the reliability, cost, and environmental implications for the electric grid. A crucial first element to understanding these implications is an accurate picture of the extent and timing of residential electricity use devoted to EVs. Although California is now home to over 650,000 electric vehicles (EVs), less than 5% of these vehicles are charged at home using a meter dedicated to EV use. This means that state policy has had to rely upon very incomplete data on residential charging use. This report summarizes the first phase of a project combining household electricity data and information on the adoption of electric vehicles over the span of four years. We propose a series of approaches for measuring the effects of EV adoption on electricity load in California. First, we measure load from the small subset of households that do have an EV-dedicated meter. Second, we estimate how consumption changes when households go from a standard residential electricity tariff to an EV-specific tariff. Finally, we suggest an approach for estimating the effect of EV ownership on electricity consumption in the average EV-owning household. We implement this approach using aggregated data, but future work should use household-level data to more effectively distinguish signal from noise in this analysis. Preliminary results show that households on EV-dedicated meters are using 0.35 kWh per hour from Pacific Gas and Electric (PGE); 0.38 kWh per hour from Southern California Edison; and 0.28 kWh per hour from San Diego Gas and Electric on EV charging. Households switching to EV rates without dedicated meters are using less electricity for EV charging: 0.30 kWh per hour in PGE. Our household approach applied to aggregated data is too noisy to be informative. These estimates should be viewed as evidence that more focused analysis with more detailed data would be of high value and likely necessary to produce rigorous analysis of the role EVs are playing in residential electricity consumption. 17. Key Words Electric vehicles, plug-in hybrid vehicles, energy consumption, demand, household, residential areas, policy analysis, empirical methods, data analysis 18. Distribution Statement No restrictions. 19. Security Classif. (of this report) Unclassified 20. Security Classif.
Replication Data for: Machine learning from schools about energy efficiency
This file contains the (unrestricted) data and code required to replicate "Machine learning ... more This file contains the (unrestricted) data and code required to replicate "Machine learning from schools about energy efficiency" by Burlig, Knittel, Rapson, Reguant, and Wolfram. As described in the readme, this project was conducted under a non-disclosure agreement with Pacific Gas and Electric, so we are prohibited from releasing some necessary data for replication. The readme describes how researchers can access the data.
icans ' incentives to work full- or part-time, this paper uses ESPlanner, a life-cycle finan... more icans ' incentives to work full- or part-time, this paper uses ESPlanner, a life-cycle financial planning program, in conjunction with detailed modeling of transfer programs to determine (1) total marginal net tax rates on current labor supply, (2) total net marginal tax rates on life-cycle labor supply, (3) total net marginal tax rates on saving and (4) the tax-arbitrage opportunities available from contributing to retirement accounts. In seeking to provide the most comprehensive analysis to date of fis-cal incentives, the paper incorporates federal and state personal income taxes, the FICA payroll tax, federal and state corporate income taxes, federal and state sales and excise taxes, Social Security benefits, Medi-care benefits, Medicaid benefits, Foods Stamps, welfare (TAFCD) ben-efits, and other transfer program benefits. The paper offers four main takeaways. First, thanks to the incredible complexity of the U.S. fiscal system, it's impossible for anyone to under-
Replication data for: Knowledge Is (Less) Power: Experimental Evidence from Residential Energy Use
Imperfect information about product attributes inhibits efficiency in many choice settings, but c... more Imperfect information about product attributes inhibits efficiency in many choice settings, but can be overcome by providing simple, lowcost information. We use a randomized control trial to test the effect of high-frequency information about residential electricity usage on the price elasticity of demand. Informed households are three standard deviations more responsive to temporary price increases, an effect that is not attributable to price salience. Conservation extends beyond pricing events in the short and medium run, providing evidence of habit formation and implying that the intervention leads to greenhouse gas abatement. Survey evidence suggests that information facilitates learning.
Are Residential Electricity Consumers Utility Maximizers? Evidence from a Natural Experiment∗
together research and curricular programs on energy business, policy and technology commercializa... more together research and curricular programs on energy business, policy and technology commercialization.
Barriers to Low-Income Electric Vehicle Adoption in California: An Assessment of Price Discrimination and Vehicle Availability
Author(s): Muehlegger, Erich, PhD; Rapson, David, PhD | Abstract: Adoption of alternative fuel ve... more Author(s): Muehlegger, Erich, PhD; Rapson, David, PhD | Abstract: Adoption of alternative fuel vehicles by African-American, Hispanic and low-income consumers has lagged adoption by Asian, White and high-income consumers. Understanding the low-rate of adoption for certain demographic groups is of particular interest to California. In 2015, the Clean Energy and Pollution Reduction Act (SB 350) was signed into law and requires the California Air Resources Board (CARB) to study barriers to zero-emission transportation options faced by low-income consumers. This study analyzes data for over 400,000 California vehicle sales between 2011and 2015, containing information on the price paid by the consumer, the location of dealership, the zip code of the buyer and buyer demographic characteristics (e.g., race, gender, income, age) for each transaction. Researchers test for the presence of two commonly asserted barriers to electric vehicle (EV) adoption: (1) price discrimination against low-in...
Electrification is a centerpiece of global decarbonization efforts. Yet there are reasons to be s... more Electrification is a centerpiece of global decarbonization efforts. Yet there are reasons to be skeptical of the inevitability, or at least the optimal pace, of the transition. We discuss several under-appreciated costs of full, or even deep, electrification. Consumer preferences can operate in favor of and in opposition to electrification goals; and electrification is likely to encounter physical and economic obstacles when it reaches some as-yet-unknown level. While we readily acknowledge the external benefits of decarbonization, we also explore several under-appreciated external costs. The credibility and eventual success of decarbonization efforts is enhanced by foreseeing and ideally avoiding predictable but non-obvious costs of promising abatement pathways. Thus, even with all of its promise, the degree of electrification may ultimately reach a limit. * We thank Lutz Kilian and Kunal Patel for helpful comments, and Reid Taylor and Jessica Lyu for excellent research assistance. All opinions and errors are our own. The views expressed here are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System. The order in which the authors' names appear has been randomized using the AEA Author Randomization Tool (ntsoJeCwKuS), denoted by ⓡ.
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Papers by David Rapson