Energy Efficiency Policies

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Energy efficiency policies usually consist of instruments of governmental intervention into the energy market. These instruments aim to overcome barriers to investment in EE improvements. Although there are some standard policy measures for governmental intervention in markets, such as taxes, subsidies, laws, regulations and provision of information or provision of services, their application varies according to each sector, taking into account their different characteristics. Table 4.3 gives an overview of further policy-relevant features of energy sectors.

The choice of applied policy instrument is not only a matter of rational and techno-economic consideration, but is strongly dependent on

34 Friedemann and Andreas 1997.

Table 4.2 Overview of Factors Fostering the Implementation of EE Programmes





Innovative actions

Innovative actions by stakeholders are important with regard to improving the image of the



Material incentives are seen as most effective while non-material ones are effective as supplementary


Social influence

Social norms are influential as negative incentives, such as public pressure, while positive social

incentives, such as rewards seem to work.

Experiences and models

Previous experience of an organization, as well as successful models and reports provided by

organizations are helpful.



Committed actors in the organization foster decisions, which are economically and environmentally


Sense of mastery

The willingness to overcome obstacles is decisive.

Social pressure

Withstanding the pressure fostered from outside the organization.

Preparation for action

Models and experiences

Distribute successful models and experience reports within the organization.


Analyze the techno-economic baseline, one's own skills and competencies as well as those of target



Create an early and broadly based cooperation with local actors.


Make a test run of the EE programme (not only for monitoring the programme technically but also

for commercial purposes).


Learning from experience

Orientation to exemplary precursor programmes.

Cost reduction

Dispelling the factors that hinder in target group, such as environmental and social costs.

Programme funding

Programme expenditure

Reduction of programme expenditure by following routine activities, standardization and free

provision of third party services.

Risk assumption

Risk assumption by suitable persons or institutions in the case of necessary p re-financing.

{Table 4.2 Continued)

{Table 4.2 Continued)

{Table 4.2 Continued)




Public relations and information strategy

Additional sources High effort Personal relevance Advantages

Face-to-face communication Opinion leaders

Social comparison

Evaluation mechanism Monitoring

Measurement Process evaluation and corrections Keeping attention Motivation



Positive relations Publicity

Find sources in addition to public budgets, e.g., via contributions, donations, participation fees, etc.

High intensity of promotion and appropriate provision of funds.

Pay attention to local networks, clarity and real world practicality of the information and message conveyed.

Communicate a wide variety of advantages of participating in the programme, taking aspects of economic efficiency into account.

Use the word of mouth and personal discussions to step up knowledge of the programme. Secure participation of multipliers and opinion leaders, particularly with regional networks, and institutions without vested interests.

Prompting processes of social comparison (neighbourhood, municipal district, etc.) and competition.

Ongoing programme monitoring and evaluation is a precondition for systematic further development and organic integration into existing structures.

Developing suitable standards and measuring instruments and indicators at the planning stage. Enable corrections in the course of the programme by means of process evaluation.

Feedback of intermediate results keeps the programme in people's minds.

Besides keeping attention and signalling the progress, feedback can generate community spirit and a feeling of belonging. It engenders further motivation to participate.

Look at feedback as a precondition for generating a process of dialogue and interactive exchange between actors and participants.

Feedback provides positive effect on the programme organizers (image, customer ties). Good contact with the local press is important for the mediation of feedback to the public.

Source: Authors.

Table 4.3 Features of the Energy Sector Relevant to Policy


Capital stock turnover Key decision maker

Main policy developments related to climate change

Residential and commercial 10—50 years For example, buildings, appliances or office equipment

Gas, oil and power production > 30 years

Industry > 10—15 years

For example, industrial equipment

Transport > 50 years

For example, infrastructure

Large number of decision makers, such as individual consumer, contractors or financial institutions.

Small number of large players, sometimes government owned or regulated.

Relatively small number of decision makers, strongly driven by bottom line.

Government and private sector actors at the local, regional and national levels. High complexity as local decisions have implications for national policy.

Regulatory and social instruments; building energy efficiency standards, technical assistance, audits, fiscal incentives for improving thermal efficiency and labelling.

Electricity and gas market liberalization and deregulation, subsidy reform, falling prices, natural gas gaining market share in power sector or shift in policies for environment. Voluntary approaches, search for eco-efficient materials and energy intensity improvements, some regulatory mechanisms which are widely exempted from environmental tax instruments. Limited climate policy initiatives, some regulatory reforms, land use and community planning interacting with national policy.

Source: Based on OECD 2003.3:

35 Based on OECD 1999c, 2003. National Climate Policies and the Kyoto Protocol, p. 37, with permission from OECD.

various actors.36 Most authors support the view that each policy instrument is linked to its own political economy and is distinct according to certain criteria of political choices, such as its degree of state intervention or the number of administrative and institutional resources needed.37 Labels and standards are examples of instruments which are widely used, especially to improve the EE of home appliances and office equipment—a sector of fast growing energy use.38 Labels inform about the energy use or EE of a certain product,39 while standards regulate minimum efficiency or maximum energy use levels for products in a mandatory way. The EU, for instance, applies labels on cloth dryers and washers, cloth washer-dryers, dishwashers and lamps as well as labels and standards on refrigerators and freezers. An outcome of the EU labelling programme was an improvement in EE of 6 per cent (from 2000 to 2004).40

Research and development (R&D) in EETs, such as low carbon fuels, advanced solar photo-voltaic technologies, is seen as long-term effort to reduce energy consumption levels. However, energy-related R&D carried out in an organized way by different actors and institutions, such as corporations, financial institutions or universities frequently does not achieve the expected short-term results. To help remedy this, the industry should play a key role in the development and implementation of new technologies. An efficient and productive approach to energy-related R&D requires the collaborative efforts of the government, industry and other organizations. There are two issues worth mentioning that highlight the complexity of the linkage between EE, R&D and policy. These are the concept of EE and the research environments which are interdependent. Different structures of interaction influence research priorities and the conceptualization of EE.41 Figure 4.6 gives an example of two possible research environments. These correlate with a certain degree of involvement of actors as far as the formulation of research schemes is concerned. Within the

36 OECD/IEA 2000; Varone and Aebischer 2001. In Varone and Aebischer (2001) a detailed empirical and comparative study of the applied policy instruments in the area of household appliances and office equipment in Canada, Denmark, United States, Sweden and Switzerland from 1973 to 1996 is given. OECD/IEA (2000) provides an overview over current labels and standards programmes in IEA countries.

37 Varone and Aebischer 2001, 617.

38 According to IEA 2006b, labels are used in 37 and standards in 34 countries.

39 Labels comprise different varieties, such as 'comparison labels' or 'endorsement labels' (OECD/IEA, 2000, 10). A famous example is the US Energy Star programme.

40 IEA 2006b.

41 Guy and Shove 2000.

'close communities'42 model, research schemes are negotiated informally among all actors. In contrast, within the 'coordinated contractors'43 model, research schemes respond mainly to policy, whereas industry is not involved directly.44 This may have an impact on research objectives. Research management and funding further influences the range of disciplines considered and may hinder or enable opportunities for effective interdisciplinary inquiry.45 In the 'close communities' model, the disciplinary boundaries within which the energy problem is positioned were found to be relatively flexible, whereas in the 'coordinated contractor' model a more technical perspective dominates.46 Also the scientific institutions and research organizations should be seen as more or less impartial policy advisors and play an important role in reducing global environmental risks.47

Figure 4.6 Research Environments

Figure 4.6 Research Environments

Government project ^ officers o Researchers

^ Industry

- Internal links

Source: Guy and Shove 2000

Source: Guy and Shove 2000

Government project ^ officers o Researchers

^ Industry

- Internal links f-^ Government project officers f-^ Government project officers

9 Researchers

- Formal contracts and informal ties

Coordinated contractors

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Getting Started With Solar

Getting Started With Solar

Do we really want the one thing that gives us its resources unconditionally to suffer even more than it is suffering now? Nature, is a part of our being from the earliest human days. We respect Nature and it gives us its bounty, but in the recent past greedy money hungry corporations have made us all so destructive, so wasteful.

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