Energy efficiency presents a unique opportunity to address three energy-related challenges in IEA member countries: energy security, climate change, and economic development. Yet an energy-efficiency gap exists between actual and optimal energy use. That is, significant cost-effective energy efficiency potential is wasted because market barriers prevent countries from achieving optimal levels. Market barriers take many forms, from inadequate access to capital, isolation from price signals, information asymmetry, and split-incentives. Though many studies have reported the existence of such market barriers, none so far have attempted to quantify the magnitude of their effect on energy use and efficiency.
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