Energy efficiency and the limits of market forces: The example of the electric motor market in France

This paper addresses the limits of market forces as the exclusive driving force for energy efficiency. The electric motor market in France is analysed, with particular emphasis on the structure and functioning of the market, as well as the decision-making practices of the main agents. The study shows that market forces are constrained by the variety of transaction types and by the decision-making practices of agents, in an environment characterised by lack of information and split incentives for adopting energy-efficient technological options. The paper argues that public intervention is a necessary condition for organising the market and promoting energy efficiency. The article points out the main obstacles to the diffusion of efficient electric motor technologies and suggests some initiatives for market transformation,(C) 1998 Elsevier Science Ltd. All rights reserved.