Economists have been talking about the "Energy Efficiency Paradox" for nearly twenty years. The puzzle is why so few people take simple steps-such as replacing inefficient light bulbs or fixing home insulation-that engineers and other experts assure us would save energy, save money, and perhaps even help save the planet. Funds from this grant will support a project by Stephen Brick, Armond Cohen, and Joseph Chaisson of the Clean Air Task Force to start a process for studying the Energy Efficiency Paradox systematically, comprehensively, theoretically, empirically, and impartially. Their first step will be to survey what is known, unknown, and unknowable about the energy efficiency paradox. This will be accomplished in cooperation with a group of experts they will convene, including not just economists but also other social scientists, policymakers, marketers, and industry experts. Based on the survey findings, the main task for that group will be to develop and publish an overall conceptual framework for organizing research on energy efficiency. The focus will be on end-user efficiency decisions concerning residential and commercial buildings and will include considerations about costs and benefits, engineering and behavior, trends and uncertainties, finance and discounting, technology and regulation, etc. The expert group's output will also include a draft "Request for Proposals." This document, when circulated together with the framing paper, would ask appropriate research institutions to formulate plans and projects that the Sloan Foundation and others might consider for future funding to help resolve the fundamental questions this project will identify about energy efficiency and its supposed paradoxes.

In the United States, buildings account for about 39% of all energy use, 68% of all electricity consumption, and 38% of all carbon dioxide emissions. Engineers estimate that retrofits for weatherizing built environments can substantially reduce waste enough to quickly pay for themselves, while also helping to decrease energy consumption and curb carbon emissions. But given the chance to save money and energy this way, the conventional wisdom is that many individuals and businesses do not take full advantage of energy efficiency investments that can save them money in the long run. The Sloan Foundation has begun funding work on this important issue by different kinds of researchers, ranging from behavioral economists to environmental engineers. Sloan funds have also helped launch the first large-scale randomized experiment to study weatherization programs. Based at the University of California, Berkeley, this pilot project has already discovered unexpected evidence that low-income homeowners are even less willing to take advantage of weatherization programs than previously thought. Moreover, such reluctance remains strong even among homeowners randomly chosen to receive encouragement and help with the process of weatherization. One implication of this finding is that the pilot study as originally planned will not have enough "statistical power" to justify robust policy conclusions. In order to refine the statistical validity of the findings, a larger sample of households is needed. Funds from this grant will support efforts by the University of California, Berkeley team to strengthen their experimental design and expand the number of households surveyed, allowing for more robust statistical conclusions that have the potential to appropriately shape policy discussions about energy utilization.