Policy modeling for energy efficiency improvement in US industry

We are just beginning to evaluate and model the contributions policies make toward improving energy efficiency. In this article, three recent studies are reviewed. They represent an important step in the analyses of climate-c hange mitigation strategies. All studies model estimated policy impacts rat her than the policies themselves. Often the policy impacts are based on ass umptions, as the effects of a policy are not certain. Most models incorpora te only economic (or price) tools, which, for estimating impacts, costs, an d benefits of mitigation strategies, recent studies have proven are insuffi cient. The studies reviewed are a first effort to capture the effects of no nprice policies. They contribute to a better understanding of the role of p olicies in improving energy efficiency and mitigating climate change. All p olicy scenarios result in substantial energy savings compared with the base line scenario used: they also result in substantial net benefits to the US economy. Because the industrial sector is the most diverse and, arguably, t he most challenging energy-demand sector to model, studying policies for th em is no easy task. The challenges, which are many, fall into two categorie s: appropriate level of detail (i.e., sector, technology, and policy) and r epresentations of decision making. A better understanding of decision-makin g behavior, technology choice, and policy impact and effectiveness is neede d to improve our understanding of the potential effectiveness of future ene rgy efficiency policies as well as to improve policy modeling. With these d evelopments, the current and next-generation policy models and studies have the potential to become richer representations of the industrial sector.