Barriers to Energy Efficiency – Focus on Transaction Costs

Abstract

This paper assesses the main barriers that prevent economic energy efficiency potential from being realized. The main barriers discussed here include energy prices (and prices of technology), limited access to capital, lack of information, incorrect risk assessment (i.e. setting a discount rate), the principal-agent problem and transaction costs. Transaction costs are analyzed in greater detail, as they are one way or another related to all of the barriers mentioned here. Based on the analysis, there is a discussion of implications for effective policy making. These are specially needed for transaction costs, where the availability of empirical data is very limited.

Keywords

• barriers to energy efficiency
• transaction costs
• energy efficiency gap
• energy efficiency instruments