Common Tragedies

Thoughts on Environmental Economics

Daylight saving time increases energy use

Posted by Daniel Hall on February 28, 2008

I posted previously about research that showed that at the margin, extending daylight saving time (DST) doesn’t save energy, suggesting that the U.S. isn’t going to get any energy benefit from it’s recent extension of DST. (DST begins March 9 this year in the U.S. Prior to 2007 it would have started 3 weeks later.) I noted in that post, however, that “this doesn’t mean DST does not save energy for the parts of the year where it is already used, merely that it likely cannot be extended at the margin for increased energy savings.”

A new research paper now speaks to the larger question of whether DST as a whole saves energy, and suggests rather that the institution increases energy use. Matthew Kotchen and Laura Grant exploit a natural experiment in Indiana and report:

Our main finding is that—contrary to the policy’s intent—DST increases residential electricity demand. Estimates of the overall increase range from 1 to 4 percent, but we find that the effect is not constant throughout the DST period. There is some evidence of electricity savings during the spring, but the effect lessens, changes sign, and appears to cause the greatest increase in consumption near the end of the DST period in the fall. These findings are consistent with simulation results that point to a tradeoff between reducing demand for lighting and increasing demand for heating and cooling. Based on the dates of DST practice before the 2007 extensions, we estimate a cost of increased electricity bills to Indiana households of $8.6 million per year. We also estimate social costs of increased pollution emissions that range from $1.6 to $5.3 million per year.

It looks like the upshot is that while DST saves energy on lighting, it uses extra energy for heating and cooling, particularly for AC use in late summer and early fall. (People are going home from work and running their ACs longer and harder because of the extra daylight.) Yesterday’s WSJ had a great write up of the results. The Indianapolis Star ran a story today. As pointed out by the WSJ, there are other reason for DST beyond energy use:

There may also be social benefits to daylight-saving time that weren’t covered in the research. When the extension of daylight-saving time was proposed by Mr. Markey, he cited studies that noted “less crime, fewer traffic fatalities, more recreation time and increased economic activity” with the extra sunlight in the evening.

The $8.6 million that DST is costing Indiana households on their electricity bills works out to $3.19 per household per year, so it may be a price worth paying.

Matt was one of my favorite professors in grad school at UC Santa Barbara. He’s an engaging and thoughtful guy, and really smart about designing interesting research questions. Here is Matt suggesting that we should drill for oil in ANWR. Here he is on household participation in green electricity programs.

If you’re in DC in early April (the 10th) and want to hear Matt talk about these results, come by RFF for an academic seminar. Please come!

H/T: Tyler Cowen.

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