Kai Gao

Ecodesign regulations often assess efficiency in specific operating modes, while real-world energy use depends on efficiency across modes and consumers’ choices among them. I study this mismatch in washing machines, where energy labels assess only the Eco program. On the demand side, I find that consumers rarely use the Eco program yet favor higher-rated machines, misinterpreting the ratings as measures of whole-machine efficiency. On the supply side, energy use falls in Eco but rises in hotter Cotton programs following an EU energy-label reform. I develop and estimate an equilibrium model of consumers’ product and program choices and firms’ program design to quantify the implications for energy use and welfare. The model implies that the reform increases total energy consumption by 4.1%, driven by more energy-intensive Cotton programs and consumer substitution toward them. The welfare effect reflects a trade-off between improved cleaning performance and higher energy costs. I then examine alternative label formulas that incorporate both Eco and Cotton performance. Broadening the formula reduces energy consumption while maintaining consumer welfare, demonstrating the importance of accounting for consumer use in regulatory design.

I study how price subsidies affect wind turbine repowering—the replacement of old turbines with new ones—in Denmark. I develop a dynamic model of developers’ operational decisions to disentangle the roles of the feed-in tariff and the scrapping certificate program in repowering. I estimate the model using a panel of 7,541 Danish wind turbines observed from 2000 to 2020. The results indicate that price subsidies account for 15% of the increase in capacity from repowering over the sample period. Extending the subsidy eligibility period by ten years reduces repowering capacity by 4%.