ENERGY SAVING INCENTIVES AND INSTITUTIONAL ENVIRONMENT: A CROSS COUNTRY ANALYSIS. PART 1

Abstract

We suggest as a hypothesis that the main reason why energy efficiency of production in Russia is substantially lower than in developed economies is the weakness of energy saving incentives brought about by shortcomings of institutional system. To demonstrate this we present a theoretical model of energy consuming economic sector and show that the higher is transaction costs caused by facing firms the lower is a probability that any energy saving measures would be undertaken as a respond to a energy price rise. We included into regressions for energy intensity coefficients for 77 World economies constructed for a period of the middle of the previous decade institutional variables which made it possible to estimate demand for energy price elasticities differentiated by individual economies. Average of these indices for CIS economies (by its absolute values) showed itself to be almost four times lower than that for OECD countries.

Keywords

• energy intensity
• energy conservation
• World economies
• price elasticity
• institutions
• Cournot competition
• энергоемкость
• энергосбережение
• экономики мира
• эластичность по цене
• институты
• конкуренция по Курно