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Policies for Energy Efficiency Energising Cleaner Production Management Course

Policies for Energy Efficiency Energising Cleaner Production Management Course. Session Agenda:. Types of policy instruments Definitions and Examples Evaluation of policy instruments. But first… In what step(s) of the methodology is lack of policies or enforcement a barrier?.

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Policies for Energy Efficiency Energising Cleaner Production Management Course

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  1. Policies for Energy Efficiency Energising Cleaner Production Management Course

  2. Session Agenda: Types of policy instruments Definitions and Examples Evaluation of policy instruments

  3. But first… In what step(s) of the methodology is lack of policies or enforcement a barrier?

  4. 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

  5. Policy instruments types

  6. Legislative instruments:Definitions • 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)

  7. Legislative instruments:Energy 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

  8. Legislative instruments:Minimum energy performance 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

  9. Economic instruments:Definitions • 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

  10. Economic instruments:Petrol 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

  11. Economic instruments:Subsidies 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

  12. Voluntary instruments:Definitions • 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

  13. Voluntary instruments:Energy 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”

  14. Voluntary instruments:Energy 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

  15. Voluntary instruments:Energy 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

  16. Environmental effectiveness Economic efficiency Policy instrument Budgetary impact Ability to implement & enforce Stakeholder support How to evaluate policy instruments:5 evaluation criteria

  17. How to evaluate policy instruments:Environmental 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

  18. How to evaluate policy instruments:Economic 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!

  19. How to evaluate policy instruments:Budgetary 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

  20. How to evaluate policy instruments:Ability to implement and enforce

  21. How to evaluate policy instruments:Support from stakeholders

  22. Conclusions • 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

  23. Policies for Energy Efficiency Thank you for your attention!

  24. Acknowledgements • 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 projectthat 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

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