Consumer surplus from energy transitions

Produced as part of the Evaluating the performance of climate policies CCCEP research programme theme

Energy transitions have led to major advances in human wellbeing. However, little evidence exists about the scale of the net benefits. By developing a new method for identifying the demand curve, and by using a unique, historical dataset, this paper estimates the consumer surplus associated with heating, transport and lighting over more than 200 years and identifies the gains from a number of key energy transitions.

For certain energy transitions, the increase was dramatic, reflecting the transformations in society and lifestyles that mobility and illumination provided in the 19th and 20th centuries. Yet the net benefits related to heating technologies only rose modestly. Furthermore, due to saturation effects of the demand for energy services, future technological developments and energy transitions may benefit consumers (though not necessarily society as a whole) less than those in the past.

ISSN 2515-5717 (Online) – Grantham Research Institute Working Paper series

ISSN 2515-5709 (Online) – CCCEP Working Paper series