Articles by Eric de Place

What happens with a new president?

This is part of a short series of posts that explain some important but often overlooked policy issues in the Western Climate Initiative — the West’s regional cap-and-trade system. (Much […]

Some good news about high gas prices

I’m a bit late on this, but it’s still worth mentioning. Via The New York Times: Traffic deaths in the United States declined last year, reaching the lowest level in […]

Our right to know about fuel-efficient tires

I’m always fascinated by the “1 percent solutions” to energy. It seems to me that in order to address both climate change and fossil fuel dependence, we’ll need a few […]

The cheaper the power, the more we use

I'm going to geek out for a second. But first, check out this graph:

I suppose there are two lessons:

1. Price and consumption are not perfectly correlated. Clearly there are many non-price factors affecting electricity consumption. (These include, at least, the local climate, building size and type, and local energy efficiency policies.) But still ...
2. Price definitely affects use, and the fit gets better as you move up the price axis. The more expensive electricity is, the less likely consumers are to be profligate.

In energy circles it's sometimes alleged that consumers are price insensitive or economically irrational about consumption. There's some truth to that, but it's only a partial truth.

These charts help demonstrate why carbon pricing can be effective. Putting a price on carbon -- or a price on energy -- acts to reduce consumption. Price is not the only factor and it may not even be the biggest factor, but it does appear to matter. And it appears to matter more above about 10 or 12 cents per kilowatt hour.

This hooks into a larger debate in the Western Climate Initiative.