A theory-based approach to market transformation

Market transformation (MT) programs face numerous challenges in identifying targets, understanding markets, and intervening effectively in them. Traditional energy efficiency program approaches generally lack the tools necessary to meet those challenges. New energy market realities and new public good roles for government will require more sophisticated forms of MT that focus on markets rather than end users. One such approach, being developed by the California Energy Commission, stresses the importance of theory-based MT, with tight linkages between existing theory, program design, empirical testing of crucial assumptions, evaluation, and theory development. Feedback and iterative learning are involved at all stages. Because a clear understanding of market dynamics is crucial to this approach, multidisciplinary research plays a key role.