The Ralph C. d’Arge and Allen V. Kneese 2009 Award for
Outstanding Publication in the Journal of Environmental Economics and Management
Ryan Kellogg and Hendrik Wolff
“Daylight Time and Energy: Evidence From an Australian Experiment”
vol. 56 (3), 2008
The authors challenge a perceived wisdom going back to Benjamin Franklin -- that shifting the clock can save energy. Based on this convention wisdom, several countries have sought to extend Daylight Savings Time (DST) in an effort to reduce energy demand and hence slow the release of greenhouse gases. However, whether, or to what extent, this will actually reduce energy use is an empirical question. The paper shows that in one prominent case, it did not. Using a unique quasi-experiment in which part of Australia extended DST because of the summer Olympics in Sydney, the authors conduct a novel analysis of the effect of DST on electricity demand. Their results show that the extension of DST reduced electricity demand in the evening but increased demand in the morning, thereby yielding no overall net reduction. The implication is that the U.S. experiment, and California's proposed extension, are unlikely to be effective means of reducing energy use . As such, this paper offers clear and important policy implications.