Energy ill-starred

Startling revelation of the day: people who rent apartments tend to have fewer energy-efficient appliances than those who own their own homes.

You’ve already figured this one out, of course, but here’s the explanation:

In most rental units tenants pay their own electricity bills, so landlords don’t have much incentive to invest in energy-efficient appliances. Landlords would only benefit from buying more costly energy-efficient appliances if enough tenants were willing to pay slightly higher rents in exchange for the lower utility bills. Unfortunately, tenants typically have no way to learn the energy efficiency of each appliance in each potential apartment and translate that efficiency into projected utility bills. Thus, tenants are rarely willing to pay higher rent for more energy-efficient apartments.

In a few areas, tenants can find this information, but most of the time they don’t. And if lower energy expenditure vs. higher rent comes out as a wash, incentive is exactly zero. Captain Obvious at the WaPo (first link) sees this as a “market failure,” which is apparently defined these days as any transaction in which the government doesn’t get what it wants.







3 comments

  1. McGehee »

    22 December 2012 · 7:35 pm

    The market achieves what the market wants. Always.

    While government spins its wheels trying to make the market want what the government wants it to want, said government would do better by its citizens and (therefore) itself if it chose to want what the market wants.

  2. Mark Alger »

    23 December 2012 · 10:18 am

    And one of the ways the government gets slantwise of the market is by trying to force the entire population into rented apartments. To preserve the land, which scoffs at the notion it needs preservation.

    M

  3. Trumwill »

    24 December 2012 · 8:01 pm

    which is apparently defined these days as any transaction in which the government doesn’t get what it wants.

    Pure gold.

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