Thread by @mattkahn1966

I agree. When I taught at UCLA, I proposed the following field experiment to @LADWP. Their team rejected this. In Los Angeles, many poor people rent apartments in older apartment buildings. These apartments feature old energy inefficient refrigerators. (1/N)

https://twitter.com/FriedrichHayek/status/1362885287676760064

I proposed to LADWP that they go in replace the old fridge with a new energy efficient fridge and then rent the energy efficient fridge to the tenant. Given market power as a big buyer, LADWP could purchase 10,000s of these fridges at a lower price.

A renter in the treatment group would now face a lower electricity bill and would pay a rental fee for the fridge. If energy savings gains from an Energy Star fridge are large, the eligible poor would save $ and GHG emissions would fall. Energy inefficiency would decline.

Note that my proposal solves the split incentives problem faced by renters. Renters often move and the fixed cost of taking your fridge with you are too large and poor people face financing constraints in paying for green durables.

My proposal addressed part of the problem that old rental housing features old durables and poor people face financing constraints in upgrading the durables to "cutting edge" green new goods. My "free markets" proposal was rejected!!

I proposed a formal randomization at the start to trace out renter electricity bills over time for those in the treatment group and in the control group. Note that a professional company (the maker of the Energy Star fridge) would be involved here.

There is a direct link to the Texas Freeze. Local electric utilities could offer discounted insulation services to home owners and pilot whether this is cost-effective in reducing energy inefficiency during the next deep freeze. This would lower blackout risk.

I prefer enrolling more customers in Critical Peak Pricing. Read my blog post from 2 days ago. Energy economists need to start tweeting about demand side conservation policies here.
greeneconomics.blogspot.com/2021/02/climat…