Paternalism and Energy Efficiency: An Overview

This review paper provides an overview of the application of behavioral public economics to energy efficiency. I document policymakers' arguments for "paternalistic" energy efficiency policies, formalize with a simple model of misoptimizing consumers, review and critique empirical evidence, and suggest future research directions. While empirical results suggest that policies to address imperfect information or internalities may increase welfare in some cases, some existing policies may be mistargeted or of the wrong magnitudes.