Energy-saving behavior and marginal abatement cost for household CO2 emissions

This paper attempts to measure consumers' perceived net benefits (or net costs) of energy-saving measures in using energy-consuming durable goods. Using the estimated net costs and the volume of CO2 reduced by the measures, a marginal abatement cost (MAC) curve for the average household's CO2 emissions is produced. An analysis using the curve suggests that in order to provide households with an incentive to take actions that can lead to CO2 emission reductions in using energy-consuming durables, a high level of carbon price is needed. In addition, a regression analysis reveals that the net benefits of the measures are larger for households that put a higher priority on energy saving, for those living in detached houses, for those with a smaller number of persons living together, and for those with less income. The result of the analysis using the MAC curve may suggest that promoting energy-saving behavior will require not only a policy to provide economic incentives but also interventions to influence psychological factors of household behavior. - Highlights: • Consumers' perceived net costs of energy-saving measures in using energy-consuming durables are measured. • Using the estimated net costs, a marginal abatement cost (MAC) curve for the average household's CO2 emissions is produced. • A high carbon price is needed in order to provide households with an incentive to take actions for energy-savings. • Households' attributes affecting their energy-saving behavior are revealed by a regression analysis