OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

What Impedes Household Investment in Energy Efficiency and Renewable Energy?

Energy efficiency and renewable energy technologies provide important opportunities to reduce greenhouse gas emissions. However, households fail to take up many clean energy investments that are cost-effective. This paper reviews different explanations for apparent underinvestment in energy efficiency that have been put forward in the literature. While investments in renewable energy technologies are typically not (yet) profitable, many of its drivers are similar to those that determine energy efficiency investments, and the two types of investment are therefore assessed jointly. The paper also provides new evidence regarding barriers to investment in energy efficiency based on the OECD Survey on Household Environmental Behaviour and Attitudes. Finally, policy solutions that would help overcome some of these barriers are also presented.


Keywords: behavioural failures, energy efficiency gap, market failure
JEL: Q38: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Nonrenewable Resources and Conservation / Nonrenewable Resources and Conservation: Government Policy; Q41: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Energy: Demand and Supply; Prices
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error