A Microeconomic Methodology to Evaluate Energy Efficiency by Consumption Behaviors and Strategies to Improve Energy Efficiency

Abstract

The present paper highlights a quantitative method to maximize energy efficiency based on the minimum energy consumption and maximum quality of life from consumption behaviors. Quality of life is expressed by utility, which is a Constant Elasticity of Substitution (CES) function of demands for composite goods, car trips and public transport trips. Individual energy consumption is estimated by the demand of goods and we applied this method to Nagasaki to evaluate energy efficiency. Our results showed that 28,154 kcal of energy is needed to support the life of one individual per day in Nagasaki. Furthermore, we found that 76% of energy was used for composite goods and 24% was used for mobility goods. To achieve maximum energy efficiency, our results highlight that energy should be reduced by increasing the consumption of composite goods and public transport trips, while simultaneously decreasing the consumption of car trips. Compared to residents in urban and suburban areas, individuals in Central Business Districts (CBD) were found to have higher energy efficiency. Findings in Nagasaki suggest three policy implications: First, eco-energy consumption patterns should be encouraged to decrease energy use, while maintaining quality of life. Second, mixed land use is attributed to increased energy efficiency. Lastly, the energy efficiency of mobility could be improved though increasing the attraction of public transport.