This report is authored by U-M Department of Economics PhD student Alecia Cassidy. The energy efficiency gap is the failure of consumers or producers to make energy efficiency investments that would seemingly save money or increase profits. The phenomenon is important to understand, because if it exists and reflects irrational decisions on the part of consumers or firms, then policy intervention might be warranted. This report examines evidence for the energy efficiency gap in the automobile industry, and ultimately finds that the evidence is inconclusive. Three general approaches were employed: survey research, reduced-form analysis, and discrete choice modeling. Survey research finds evidence of an energy efficiency gap. Reduced-form analyses find no energy efficiency gap. The results of discrete choice models differ, with some finding evidence of an energy efficiency gap and others finding no evidence.
This National Research Council (NRC) report assesses the potential to achieve twin goals of reducing petroleum use and cutting greenhouse gas (GHG) emissions from U.S. cars and light trucks to 80 percent below the 2005 level by 2050.
ABSTRACT. Improving the fuel efficiency of automobiles (cars and light trucks) is an important means of addressing transportation oil demand and greenhouse gas (GHG) emissions. This report examines the efficiency attainable through evolutionary changes in U.S. automobiles that have fueling characteristics as well as performance, size and other attributes similar to those of today. The analysis combines results from previous engineering studies of powertrain efficiency and load reduction with new examinations of rates of technology change and cost reduction.