policies for energy efficiency 1 policies for energy efficiency energising cleaner production...
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Policies for Energy Policies for Energy EfficiencyEfficiency
Energising Cleaner ProductionEnergising Cleaner Production
Management CourseManagement Course
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Session Agenda:Session Agenda:
Types of policy instruments
Definitions and Examples
Evaluation of policy instruments
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• task 1a: Meeting with top management• task 1b: Form a Team and inform staff• task 1c: Pre-assessment to collect general information• task 1d: Select focus areas• task 1e: Prepare assessment proposal for top management approval
Step 1: Planning and Organization
• task 2a: Staff meeting and training• task 2b: Prepare focus area flow charts• task 2c: Walkthrough of focus areas• task 2d: Quantify inputs and outputs and costs to establish a baseline• task 2e: Quantify losses through a material and energy balance
Step 2: Assessment
• task 3a: Determine causes of losses• task 3b: Identify possible options• task 3c: Screen options for feasibility analysis
Step 3: Identification of Options
• task 4a: Technical, economic and environmental evaluation of options• task 4b: Rank feasible options for implementation• task 4c: Prepare implementation and monitoring proposal for top
management approval
• task 5a: Implement options and monitor results• task 5b: Evaluation meeting with top management
Step 5: Implementation and Monitoring of Options
• task 6a: Prepare proposal to continue with energy efficiency for top management approval
Step 6: Continuous Improvement
Step 4: Feasibility Analysis of Options
• task 1a: Meeting with top management• task 1b: Form a Team and inform staff• task 1c: Pre-assessment to collect general information• task 1d: Select focus areas• task 1e: Prepare assessment proposal for top management approval
Step 1: Planning and Organization
• task 2a: Staff meeting and training• task 2b: Prepare focus area flow charts• task 2c: Walkthrough of focus areas• task 2d: Quantify inputs and outputs and costs to establish a baseline• task 2e: Quantify losses through a material and energy balance
Step 2: Assessment
• task 3a: Determine causes of losses• task 3b: Identify possible options• task 3c: Screen options for feasibility analysis
Step 3: Identification of Options
• task 4a: Technical, economic and environmental evaluation of options• task 4b: Rank feasible options for implementation• task 4c: Prepare implementation and monitoring proposal for top
management approval
• task 5a: Implement options and monitor results• task 5b: Evaluation meeting with top management
Step 5: Implementation and Monitoring of Options
• task 6a: Prepare proposal to continue with energy efficiency for top management approval
Step 6: Continuous Improvement
Step 4: Feasibility Analysis of Options
But first…But first…In what step(s) In what step(s) of the of the methodology methodology is lack of is lack of policies or policies or enforcement a enforcement a barrier?barrier?
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What are energy efficiency policies?What are energy efficiency policies?
All public interventions (policy instruments) aiming at improving energy efficiency of a country, through adequate pricing, institutional setting regulations and economic or fiscal instruments
- World Energy Council
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Policy instruments typesPolicy instruments types
Legislative instruments
Economic instruments
Voluntary instruments
Laws & regulations
Standards
Codes of practice
Fiscal
Subsidies
Property & tradable rights
Bonds & deposit funds
Liability systems
Voluntary agreements
Programs & projects
Research & development
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Legislative instruments:Legislative instruments:
DefinitionsDefinitions
• Laws & regulations: – Law: legal rules that govern a specific action,
process, product etc.– Regulation: outlines how the law should be
implemented
• Standards: provide technical and design guidance notes (e.g. for equipment)
• Codes of practice: give practical advice / guidance on how to comply with legislation (e.g. Building Code)
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Legislative instruments:Legislative instruments:
Energy Conservation LawsEnergy Conservation Laws
India “Energy Conservation Act” requires large industry to:
• Commit to energy conservation• Adhere to energy standards &
equipment labels• Appoint energy managers• Carry out annual energy audits
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Legislative instruments:Legislative instruments:
Minimum energy performance Minimum energy performance standards (MEPS)standards (MEPS)
New Zealand MEPS• Combined with mandatory labeling• Appliances and products e.g.
distribution transformers, 3-phase electric motors, heat pumps, air conditioners, fluorescent lamps
• Benefits:– 1% EE improvement + 335000 tons CO2 (2003)
– Keeps NZ manufacturers competitive
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Economic instruments:Economic instruments:
DefinitionsDefinitions
• Fiscal instruments: – Taxes, fees, charges levied to producers and
consumers
• Subsidies: – Grants, soft loans, tax allowances
• Property & tradable rights:– Licenses, rights (e.g. water, emissions)
• Bonds & deposit funds: – Money returned when environmental behavior
is met
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Economic instruments:Economic instruments:
Petrol and emission taxesPetrol and emission taxes
Denmark Carbon Dioxide Act 1993• Purpose: internalize external costs of
energy use in industry
• CO2 rates based on C content of fuel
• Tax income “recycled” back into economy
• Emission reduction of 13% 1990 - 2002
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Economic instruments:Economic instruments:
Subsidies on EE technologiesSubsidies on EE technologies
Thailand• Several subsidies:
– Favorable loans: <1.2 million, 4% interest, 7 years repayment
– 25% tax break for EE projects– Energy savings 100% tax deductible– Import duty & corporate tax exemption on new
investments in EE and renewable energy
• Combined with petrol tax
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Voluntary instruments:Voluntary instruments:
DefinitionsDefinitions
• Voluntary agreements: commitment from business to protect the environment
• Programs & projects: to increase awareness, skills and knowledge, e.g.– Information
– Demonstration projects
– Development of CP centers
• Research & development: new technologies, processes, products
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Voluntary instruments:Voluntary instruments:
Energy programs and projectsEnergy programs and projects
GERIAP project (Greenhouse Gas Emission
Reduction from Industry in Asia and the Pacific) • 9 countries, 5 sectors• Capacity building, demonstration,
survey of barriers• “Energy Efficiency Guide for Industry
in Asia”
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Voluntary instruments:Voluntary instruments:
Energy labeling schemesEnergy labeling schemes
USA Energy Star since 1992• 40 product categories• Industrial appliances: heat pumps,
lighting, office equipment, ceiling fans, boilers, air conditioners, furnaces
• Partnership with >8000 organizations to deliver information and tools to consumers
• 2001 savings: 560 trillion EJ$4.1 billion
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Voluntary instruments:Voluntary instruments:
Energy efficiency R&DEnergy efficiency R&D
Taiwan• Financed with 0.5% from sales of
petrol and electricity• Development, research and training• Industry e.g.: cogeneration, heat
recovery, electric heating• 2005: 140 GW electricity, 17000 kl fuel
oil
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How to evaluate policy instruments:How to evaluate policy instruments:
5 evaluation criteria5 evaluation criteria
Policy instrument
Environmental effectiveness Economic
efficiency
Budgetary impact Ability to
implement& enforce
Stakeholder support
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How to evaluate policy instruments:How to evaluate policy instruments:
Environmental effectivenessEnvironmental effectiveness
Has instrument reduced energy / emissions?
• Legislative: depends on resources and enforcement
• Taxes / subsidies: if high enough• Voluntary: if commitment is real,
otherwise highly uncertain
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How to evaluate policy instruments:How to evaluate policy instruments:
Economic efficiencyEconomic efficiency
Is this instrument the most cost effective?
• Legislative: higher cost than economic• Economic taxes: yes• Economic subsidies: yes, but distort
market forces• Voluntary: varies a lot!
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How to evaluate policy instruments:How to evaluate policy instruments:
Budgetary impactBudgetary impact
Does the government pay or receive?
• Legislative: penalties from non-compliance
• Economic taxes: raise revenue• Economic subsidies: high & mostly
financed by community• Voluntary: revenues in transition phase
to mandatory
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How to evaluate policy instruments:How to evaluate policy instruments:
Ability to implement and enforceAbility to implement and enforce
Enforce Consistent w. other policies
Flexible to changes
Legislative +/- +/- -
Taxes +/- - +
Subsidies + - +
Voluntary - + +
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How to evaluate policy instruments:How to evaluate policy instruments:
Support from stakeholdersSupport from stakeholders
Gov’t Industry NGOs Public
Legislative + - + +/-
Taxes +/- - + +/-
Subsidies + + +/- +/-
Voluntary + + + +
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ConclusionsConclusions
• There is a wide range of policy instruments
• No policy instrument is perfect• Most likely a mix of instruments is
needed to really improve energy efficiency
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Policies for Energy Policies for Energy EfficiencyEfficiency
Thank you for your attention! Thank you for your attention!
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• This training session was prepared as part of the development and delivery of the course “Energising Cleaner Production” funded by InWent, Internationale Weiterbildung und Entwicklung (Capacity Building International, Germany) and carried out by the United Nations Environment Programme (UNEP)
• The session is based on the report “Improving Energy Efficiency in Industry in Asia – a policy review” from the “Energy Efficiency Guide for Industry in Asia” developed as part of the GERIAP project that was funded by the Swedish International Development Cooperation Agency (Sida)
• While reasonable efforts have been made to ensure that the contents of this publication are factually correct and properly referenced, UNEP does not accept responsibility for the accuracy or completeness of the contents, and shall not be liable for any loss or damage that may be occasioned directly or indirectly through the use of, or reliance on, the contents of this publication.
• The report and references are available on www.energyefficiencyasia.org
AcknowledgementsAcknowledgements