Policy inducement effects in energy efficiency technologies. An empirical analysis of the residential sector

Abstract

Energy efficiency technologies represent a key driver for the reduction of energy demand, leading to environmental and economic benefits. This aspect appears to be particularly relevant in the residential sector, where the demand for energy has not shown a decreasing trend over the last two decades. Our study provides a wide-ranging empirical analysis of the drivers of innovation in energy efficiency technologies by looking at the residential sector for a comprehensive panel of 23 OECD countries over the 1990–2010 period. It confirms the importance of adopting a systemic perspective when examining eco-innovation. In particular, the innovation system at both national and sectoral levels, together with the environmental and the energy systems, is found to have encouraged the propensity to innovate and significantly shaped the rate and direction of technical change in the residential sector. A general policy inducement effect is found to be relevant, but the size of its contribution for new energy efficient technologies changes if disaggregated policy instruments are factored in. We note a positive and significant impact driven not only by standard regulations but also by policies aimed at improving the level of consumer information and awareness. This evidence has noteworthy policy implications and suggests paths for the further development of research in this field.