View source for Energy economics

{{Short description|Discipline that includes topics related to supply and use of energy in societies}}
{{other uses}}
{{Distinguish|Ecological economics|Environmental economics|Natural resource economics|Thermoeconomics}}
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'''Energy economics''' is a broad [[science|scientific]] subject area which includes topics related to [[energy supply|supply]] and [[energy demand|use]] of [[energy]] in [[society|societies]].<ref>Sickles, Robin (2008). "energy economics." ''[[The New Palgrave Dictionary of Economics]]'', 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_E000082&q=energy%20&topicid=&result_number=1 Abstract.]</ref> Considering the cost of [[Energy service company|energy services]] and associated value gives [[Economics|economic meaning]] to the [[efficiency]] at which [[energy]] can be produced.<ref>{{Citation|last1=Giraudet|first1=Louis-Gaëtan|title=The Economics of Energy Efficiency, a Historical Perspective|date=2019|url=https://halshs.archives-ouvertes.fr/halshs-02301636|language=en|access-date=2021-04-25|last2=Missemer|first2=Antoine}}</ref> Energy services can be defined as functions that generate and provide energy to the “desired end services or states”.<ref>{{Cite journal|date=2017-05-01|title=Energy services: A conceptual review|journal=Energy Research & Social Science|language=en|volume=27|pages=129–140|doi=10.1016/j.erss.2017.02.010|issn=2214-6296|doi-access=free|last1=Fell |first1=Michael James }}</ref> The efficiency of energy services is dependent on the [[Energy storage|engineered technology]] used to produce and supply energy. The goal is to minimise energy input required (e.g. kWh, [[joule|mJ]], see [[Units of energy|Units of Energy]]) to produce the energy service, such as [[lighting]] ([[Lumen (unit)|lumens]]), [[Heating element|heating]] ([[temperature]]) and [[fuel]] ([[natural gas]]). The main sectors considered in energy economics are [[transport]]ation and [[Building insulation|building]], although it is relevant to a broad scale of human activities, including [[household]]s and [[business]]es at a [[Microeconomics|microeconomic]] level and [[resource management]] and [[Environmental impact of electricity generation|environmental impacts]] at a [[Macroeconomics|macroeconomic]] level.

==History==
[[File:World energy prices 1991-2010.png|thumb|World prices for energy, 1991–2010. 2000=100.]]
Energy related issues have been actively present in economic literature since the [[1973 oil crisis]], but have their roots much further back in the history. As early as 1865, [[William Stanley Jevons|W.S. Jevons]] expressed his concern about the eventual depletion of [[coal resources]] in his book ''The Coal Question''. One of the best known early attempts to work on the economics of [[exhaustible resources]] (incl. [[fossil fuel]]) was made by [[Harold Hotelling|H. Hotelling]], who derived a price path for [[non-renewable resources]], known as [[Hotelling's rule]].<ref>{{cite journal |last=Hotelling |first=H. |title=The Economics of Exhaustible Resources |journal=[[Journal of Political Economy]] |volume=39 |issue=2 |year=1931 |pages=137–175 |jstor=1822328 |doi=10.1086/254195|s2cid=44026808 |url=http://www.e-elgar.com/shop/isbn/9781852785802 }}</ref>

Development of energy economics theory over the last two centuries can be attributed to three main economic subjects – the [[Rebound effect (conservation)|rebound effect]], the [[energy efficiency gap]] and more recently, 'green [[Nudge theory|nudges]]'.

'''[[Rebound effect (conservation)|The Rebound Effect]] (1860s to 1930s)'''[[File:Energy Economics - Instrumental Theories.png|thumb|Timeline of instrumental theories of energy economics]]

While energy efficiency is improved with new technology, expected energy savings are less-than proportional to the efficiency gains due to [[Behavioral economics|behavioural responses]].<ref name=":0">{{Citation|last1=Giraudet|first1=Louis-Gaëtan|title=The Economics of Energy Efficiency, a Historical Perspective|date=2019|url=https://halshs.archives-ouvertes.fr/halshs-02301636|language=en|access-date=2021-04-25|last2=Missemer|first2=Antoine}}</ref> There are three behavioural sub-theories to be considered: the ''direct rebound effect'', which anticipates increased use of the energy service that was improved; the ''indirect rebound effect'', which considers an increased income effect created by savings then allowing for increased energy consumption, and; the ''economy-wide effect'', which results from an increase in energy prices due to the newly developed technology improvements.<ref>{{Cite journal|date=2007-04-01|title=Technological innovation, energy efficient design and the rebound effect|url=https://www.sciencedirect.com/science/article/abs/pii/S016649720600112X|journal=Technovation|language=en|volume=27|issue=4|pages=194–203|doi=10.1016/j.technovation.2006.11.004|issn=0166-4972|last1=Herring |first1=Horace |last2=Roy |first2=Robin }}</ref>

'''[[Energy efficiency gap|The Energy Efficiency Gap]] (1980s to 1990s)'''

Suboptimal investment in improvement of energy efficiency resulting from [[market failure]]s/barriers prevents the optimal use of energy.<ref>{{Cite journal | date=2017-12-01| title=Explaining the energy efficiency gap - Expected Utility Theory versus Cumulative Prospect Theory| url=https://www.sciencedirect.com/science/article/abs/pii/S0301421517305876| journal=Energy Policy| language=en| volume=111| pages=414–426| doi=10.1016/j.enpol.2017.09.026| issn=0301-4215| last1=Häckel |first1=Björn |last2=Pfosser |first2=Stefan |last3=Tränkler |first3=Timm }}</ref> From an economical standpoint, a [[Decision-making|rational decision-maker]] with [[perfect information]] will optimally choose between the [[Trade-off talking rational economic person|trade-off]] of initial investment and energy costs. However, due to uncertainties such as environmental externalities, the optimal potential energy efficiency is not always able to be achieved, thus creating an energy efficiency gap.

'''Green [[Nudge theory|Nudges]] (1990s to Current)'''

While the energy efficiency gap considers economical investments, it does not consider [[Behavioral economics|behavioural]] anomalies in energy consumers. Growing concerns surrounding [[climate change]] and other environmental impacts have led to what economists would describe as irrational behaviours being exhibited by energy consumers. A contribution to this has been government interventions, coined "green nudges’ by Thaler and Sustein (2008),<ref>{{Cite book|last1=Thaler|first1=Richard|title=Nudge: Improving Decisions about Health, Wealth, and Happiness|last2=Sunstein|first2=Cass|publisher=Penguin Group Australia|year=2009|isbn=9780141040011|location=Camberwell, Vic.}}</ref> such as feedback on energy bills. Now that it is realised people do not behave rationally, research into energy economics is more focused on behaviours and impacting decision-making to close the energy efficiency gap.<ref name=":0" />

==Economic factors==
Due to diversity of issues and methods applied and shared with a number of [[academic discipline]]s, energy economics does not present itself as a self-contained academic discipline, but it is an applied subdiscipline of [[economics]]. From the list of [[Scientific discipline#Economics|main topics of economics]], some relate strongly to energy economics:
{{cols|rules=no}}
* [[Computable general equilibrium]]
* [[Econometrics]]
* [[Environmental economics]]
* [[Finance]]
* [[Industrial organization]]
* [[Input–output model]]
* [[Microeconomics]]
* [[Macroeconomics]]
* [[Operations research]]
* [[Resource economics]]
{{colend}}
Energy economics also draws heavily on results of energy [[engineering]], [[geology]], [[political sciences]], [[ecology]] etc. Recent focus of energy economics includes the following issues:
{{cols|rules=no}}
* [[Climate change]] and [[Politics of climate change|climate policy]]
* [[Demand response]]
* [[Elasticity (economics)|Elasticity]] of [[supply and demand]] in [[energy market]]
* Energy and [[economic growth]]
* [[Energy derivative]]s
* [[Energy elasticity]]
* [[Energy forecasting]]
* [[Energy market]]s and [[electricity market]]s  - [[liberalisation]], (de- or re-) [[regulation]]
* [[energy infrastructure]]
* [[Environmental policy]]
* [[Sustainability]]
{{colend}}

Some institutions of higher education ([[universities]]) recognise energy economics as a viable career opportunity, offering this as a [[curriculum]]. The [[University of Cambridge]], [[Massachusetts Institute of Technology]] and the  [[Vrije Universiteit|Vrije Universiteit Amsterdam]] are the top three research universities, and [[Resources for the Future]] the top research institute.<ref>{{cite web|url=https://ideas.repec.org/top/top.ene.html|title=Economics Field Rankings: Energy Economics - IDEAS/RePEc|website=ideas.repec.org}}</ref> There are numerous other research departments, companies, and professionals offering energy economics studies and consultations.

==International Association for Energy Economics==
'''International Association for Energy Economics''' ('''IAEE''') is an international [[non-profit]] society of professionals interested in [[energy economics]]. IAEE was founded in 1977, during the period of the [[energy crisis]]. IAEE is incorporated under United States laws and has headquarters in [[Cleveland]].

The IAEE operates through a 17-member Council of elected and appointed members. Council and officer members serve in a voluntary position.

IAEE has over 4,500 members worldwide (in over 100 countries). There are more than 25 national chapters, in countries where membership exceeds 25 individual members. Some of the regularly active national chapters of the IAEE are; [[USAEE]] - United States; GEE - Germany; BIEE - Great Britain; AEE - France; AIEE - Italy.

=== Publications ===
The International Association for Energy Economics publishes three publications throughout the year:

* ''[[The Energy Journal]]'', a quarterly academic publication 
* the ''Economics of Energy & Environmental Policy,'' a semi-annual publication
* the ''Energy Forum''<ref>{{Cite web|title=Regulatory Considerations for Cost Effective Integration of Electric Vehicle Charging Infrastructure|url=https://www.analysisgroup.com/Insights/publishing/regulatory-considerations-for-cost-effective-integration-of-electric-vehicle-charging-infrastructure/}}</ref>

=== Conferences ===
The IAEE conferences address critical issues of vital concern and importance to governments and industries and provide a forum where policy issues are presented, considered and discussed at both formal sessions and informal social functions.

IAEE typically holds five Conferences each year. The main annual [[Academic conference|conference]] for IAEE is the ''IAEE International Conference'' which is organized at diverse locations around the world. From the year 1996 on these conferences have taken place (or will take place) in the following cities:

* 2021 - Online Conference
* 2020 - No Conference
* 2019 - Montreal, Canada
* 2018 - Groningen, The Netherlands.<ref>{{Cite web|title=41st IAEE International Conference 2018|url=http://old.haee.gr/events/international-events/2018/41st-iaee-international-conference-2018/}}</ref>
* 2017 - Singapore.<ref>{{Cite web|title=GECF participated in the 40th IAEE International Conference in Singapore|url=https://www.gecf.org/events/gecf-participated-in-the-%E2%80%9840th-iaee-international-conference%E2%80%99-in-singapore-}}</ref>
* 2016 - Bergen, Norway.
* 2015 - Antalya, Turkey.
* 2014 - New York City, United States.
* 2013 - Daegu, South Korea.
* 2012 - [[Perth, Western Australia|Perth]], Australia (35th).
* 2011 - [[Stockholm]], Sweden.
* 2010 - [[Rio de Janeiro|Rio]], [[Brazil]].
* 2009 - [[San Francisco]], United States.
* 2008 - [[Istanbul]], [[Turkey]].
* 2007 - [[Wellington]], New Zealand.
* 2006 - [[Potsdam]], Germany.
* 2005 - [[Taipei]], [[China (Taipei)]].
* 2003 - [[Prague]], [[Czech Republic]].
* 2002 - [[Aberdeen]], Scotland.
* 2001 - [[Houston]], [[Texas]].
* 2000 - [[Sydney]], Australia.
* 1999 - [[Rome]], Italy.
* 1998 - [[Quebec]], Canada.
* 1997 - [[New Delhi]], India.
* 1996 - [[Budapest]], Hungary.

Other annual IAEE conferences are the North American Conference and the European Conference.

=== IAEE Awards ===
The Association's Immediate Past President annually chairs the Awards committee that selects the award recipients.

* Outstanding Contributions to the Profession
* Outstanding Contributions to the IAEE
* The Energy Journal Campbell Watkins Best Paper Award
* Economics of Energy & Environmental Policy Best Paper Award
* Journalism Award

==Sources, links and portals==
Leading journals of energy economics include:
* ''[[Energy Economics (journal)|Energy Economics]]''
* ''[[The Energy Journal]]''
* ''[[Resource and Energy Economics]]''

There are several other journals that regularly publish papers in energy economics:
* ''[[Energy – The International Journal]]''
* ''[[Energy Policy (journal)|Energy Policy]]''
* ''[[International Journal of Global Energy Issues]]''
* ''[[Journal of Energy Markets]]''
* ''[[Utilities Policy]]''

Much progress in energy economics has been made through the conferences of the [[International Association for Energy Economics]], the model comparison exercises of the (Stanford)  [[Energy Modeling Forum]] and the meetings of the [[International Energy Workshop]].

[[RePEc|IDEAS/RePEc]] has a collection of recent working papers.<ref>{{Cite web | url=http://ideas.repec.org/n/nep-ene/ | title=NEP-ENE: New economic research on Energy Economics &#124; IDEAS/RePEc}}</ref>

==Leading energy economists==
The top 20 leading energy economists as of December 2016 are:<ref>[[RePEc|IDEAS/RePEc]] has a [http://ideas.repec.org/i/eene.html list of energy economists] and a [http://ideas.repec.org/top/top.ene.html ranking of the same].</ref>
{{cols|rules=no}}
* [[Martin L. Weitzman]]
* Lutz Kilian
* [[Robert S. Pindyck]]
* [[David Newbery|David M. Newbery]]
* [[Kenneth J. Arrow]]
* [[Richard Tol|Richard S.J. Tol]]
* Severin Borenstein
* [[Richard G. Newell]]
* [[Rick van der Ploeg|Frederick (Rick) van der Ploeg]]
* [[Michael Greenstone]]
* [[Richard Schmalensee]]
* James Hamilton
* Robert Norman Stavins
* Ilhan Ozturk
* [[Paul Joskow]]
* Ramazan Sari
* [[Jeffrey A. Frankel]]
* David Ian Stern
* [[Kenneth S. Rogoff]]
* Rafal Weron
* Michael Gerald Pollitt
* Ugur Soytas
{{colend}}

==See also==
{{Portal|Energy|Environment|Renewable energy}}
{{div col|colwidth=30em}}
* [[:Category:Energy economists|Energy economists]] (category)
* [[Cost of electricity by source]]
* [[Ecological economics]]
* [[Embodied energy]]
* [[Energy accounting]]
* [[Energy and environment|''Energy & Environment'']]
* [[Energy balance (energy economics)|Energy balance]]
* [[Energy policy]]
* [[Energy subsidy]]
* [[EROEI]]
* [[Industrial ecology]]
* [[International Energy Agency]]
* [[List of energy storage projects]]
* [[List of energy topics]]
* [[Social metabolism]]
* [[Sustainable energy]]
* [[Thermoeconomics]]
{{div col end}}

==References==
{{Reflist}}

==Further reading==
* [http://www.scientificamerican.com/article.cfm?id=how-to-measure-true-cost-fossil-fuels ''How to Measure the True Cost of Fossil Fuels''] March 30, 2013 [[Scientific American]]
* Bhattacharyya, S. (2011). Energy Economics: Concepts, Issues, Markets, and Governance. London: Springer-Verlag limited.
* Herberg, Mikkal (2014). ''[https://web.archive.org/web/20141207140146/http://www.nbr.org/publications/issue.aspx?id=306 Energy Security and the Asia-Pacific: Course Reader]''. United States: The National Bureau of Asian Research.
* [Paul Frederick Zweifel|Zweifel, P.], Praktiknjo, A., Erdmann, G. (2017). [https://www.energy-economics.eu Energy Economics - Theory and Applications]. Berlin, Heidelberg: Springer-Verlag.

==External links==
*[http://www.usaee.org/ United States Association for Energy Economics]
*[https://uia.org/s/or/en/1100058181 UIA - International Association for Energy Economics (IAEE)]
*[https://www.iaee.org/en/resources/dls.aspx The Distinguished Lecturer Series]
*[http://www.iaee.org/en/publications/newsletter.aspx IAEE Newsletter]

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