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Energy Use: The Human Dimension
new living-room furniture, and so forth. People do not usually weigh the potential value of the energy saved by one purchase against the pleasure, convenience, or status achievable by alternative purchases. People are not likely to treat energy efficiency strictly as investment when they are not likely to consider the alternatives to energy efficiency as investments.
In households, other important energy decisions are made when furnaces, water heaters, refrigerators, and other equipment wear out. Such decisions may be made under time pressure and with only partial information, with quick replacement a more pressing issue than life-cycle energy costs. Although those decisions may affect energy use for years or even decades, the purchaser may see them as repair, not investment, decisions. Seen as a repair, a $200 water heater will be viewed as costing less than a $300 water heater—even though the latter is better insulated and consumes $25 less in energy each year. In addition, there are the serious difficulties that are involved in any effort to find complete information.
As already noted, many important decisions about energy use are made by intermediaries who are not the ultimate users of energy-using equipment. These intermediaries include developers of residential and commercial buildings and operators of automobile rental agencies. In these cases, the investors do not pay for the energy used. The investors’ concerns have to do with ultimate sale or lease of a product that is competing with similar products. For example, in new multihousehold residences, electric resistance heating is often installed to keep down the price of construction of the building, to shift responsibility for heating to the occupants, and to let the building owner escape the various management problems associated with central heating. Decisions about what appliances to install in a new building are often based more on visual appeal than on life-cycle cost. While these are certainly investment decisions, future energy costs are not involved since they will be paid by someone other than the person who makes the investment decision. Thus, the investor is relatively unconcerned with energy consumption, and the energy user is uninvolved in purchasing the durable goods that might be seen as an investment.
For all these reasons, to view energy users as only investors leads to an inaccurate account of individual behavior, even with respect to capital goods. Other views of energy users are often more applicable.
Energy User as Consumer
In another view, individuals think of their homes and automobiles as consumer goods, that is, as providing necessities and pleasures. Energy-using activities and equipment are purchased for the value of using them. Once purchased, they require money primarily to maintain or increase their ability to provide necessities and pleasures and only secondarily to increase their economic value. This view might offer an explanation of the