Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2023-07-24
Number: 23-043/VII
Author-Name: Leon Bremer
Author-Workplace-Name: Vrije Universiteit Amsterdam 
Author-Name: Sacha J. den Nijs
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Henri L.F. de Groot
Author-Workplace-Name: Vrije Universiteit Amsterdam 
Title: The energy efficiency gap and barriers to investments
Abstract: This study investigates the energy efficiency (EE) gap, referring to private agents
who are not making seemingly profitable investments to reduce energy use. We deploy a questionnaire among firms in the Netherlands in which we ask them about
investment behavior and barriers to investing in EE. A set of 16 barriers is constructed based on the literature. We find that most firms (70%) have made EE
investments in the past five years, and that the median firm has saved 10% of its energy use. The remaining profitable EE investment opportunities still leave room for
another 15% of energy savings at the median firm. We find that uncertainty about
future policies ranks as the leading barrier to EE investments, followed by lock-ins in
current equipment, and energy price uncertainty. Especially energy-intensive firms
indicate the importance of policy uncertainty. Past policies have not been successful
in addressing these barriers. Additionally, we find that a firm’s network can be an
important channel for obtaining EE investment knowledge. Classification-JEL: C83, D22, O33, Q40. 
Keywords: energy efficiency gap, barriers, investment behavior, technology adoption, policy uncertainty
File-URL: https://papers.tinbergen.nl/23043.pdf
File-Format: application/pdf
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Handle: RePEc:tin:wpaper:20230043