The free market is just as effective as building codes to reduce energy consumption

This is interesting. From How Much Energy Do Building Energy Codes Save? Evidence from California Houses by Arik Levinson

We have a tendency to visualize great social policy changes (healthcare, pre-school, education, etc.) to achieve noble ends without grounding those policies in demonstrated data around which a consensus can form. We instead paint a beautiful picture of all the benefits and omit the costs. The justification is usually that there is an issue of compelling social fairness at stake or, even more commonly, we simply can't afford to wait. We have to act! Now!

It is the pattern observed by Lord Melbourne, that the promises and benefits fail to materialize and that we would have been better off to have waited till we had information in which we could be confident rather than rushing in to seem to do good, instead of actually doing good. More specifically William Lamb, 2nd Viscount Melbourne said:

What all the wise men promised has not happened, and what all the damned fools said would happen has come to pass.

Affordable Care Act and Head Start both seem to fit.

Levinson is researching the impact of well intended regulations to reduce energy consumption via building regulations in California. From the abstract:

Regulations governing the energy efficiency of new buildings have become a cornerstone of US environmental policy. California enacted the first such codes in 1978 and has tightened them every few years since. I evaluate the resulting energy savings three ways: comparing energy used by houses constructed under different standards, controlling for building and occupant characteristics; examining how energy use varies with outdoor temperatures; and comparing energy used by houses of different vintages in California to that same difference in other states. All three approaches yield estimated energy savings significantly short of those projected when the regulations were enacted.

Laws and regulations always dampen the resilience and flexibility of an economy and remove freedom of decision-making and autonomy from the individual citizen. This is not to argue for anarchy, merely that laws and regulations have strategic costs. As long as their proposed benefits outweigh those costs, there is at least an argument to be had about whether to enact those laws and regulations.

Too often, as Levinson is documenting, we get all the costs of the laws and regulations and little or none of the benefit. Not infrequently there is an additional, unintended cost as well. Someone almost always benefits from laws and regulations, it just isn't, necessarily, the public.

Tyler Cowen summarizes the findings as:

1. In 1978 California started to enact some of the world’s most ambitious residential building energy codes. These building codes have been updated 13 times since.

2. The promise was for 80% savings for new buildings constructed after 1990. These assumptions assumed everything would go according to plan and there would be no behavioral adjustments.

3. The actual results?: “For electricity, post-1978 houses in California may be using up to 15 percent less than pre-1978 houses, but do not use less per degree-day when the weather gets hot, and do not use relatively less than similar post-1978 houses in other states with less strict building codes.” For natural gas there is a 25% savings, noting that this trend and the electricity trend both predate the 1978 legislation.

4. Levinson conjectures that most of the savings are coming from natural turnover in the housing stock disfavoring the least energy efficient units.

The goal (reduced energy consumption) was a worthwhile one. One choice was to simply let the market adjust. Other jurisdictions chose that approach and according to Levinson, they seem to have accomplished the same outcomes as did California without the costs of the regulations and the associated corruptions.

It is rare that we do post-implementation diagnostics of social policies and yet it is critical to do so. We cannot improve if we do not understand where we have failed. The incentives are almost always to pass the legislation, hope for the best, and then hide the results.