Energy Efficiency Policies around the World: Review and Evaluation

3.1 Introduction

This evaluation covers the impact of selected energy efficiency policy measures around the world to find answers to the following questions. What is the importance of energy efficiency measures? What are the priorities? What are the trends? Which measures are being favoured? What are the innovative measures? What are the results? Which measures are cost effective?

Based on a comprehensive global survey, the evaluation also draws on five in-depth case studies prepared by experts. The following measures were selected as they are widely implemented and are known to be effective; in addition, they complement the set of measures already evaluated in previous reports :

Mandatory energy audits
Energy Service Companies (ESCO's)
Energy incentives for cars
Energy efficiency obligation for energy utilities, and
Package of measures for solar water heaters.

Five experts were requested to prepare a comprehensive evaluation of these five types of instruments. Each of the experts prepared a core report of between 10 and 50 pages, completed with concrete examples of country experiences ("country case studies"). These reports have been assembled and condensed to be included in this chapter in the review of the different measures .

The full set of country case studies is included in Annex 1 of this report.

The survey of energy efficiency policy measures covers a total of 76 countries, representative of all world regions (Figure 3.1):

32 from Europe: 25 countries from the European Union (EU), plus Croatia, Iceland, Norway, Russia, Serbia, Switzerland and Turkey;
Nine from America (Argentina, Brazil, Canada, Chile, Colombia, Mexico, Peru, the United States, Venezuela;);
17 from Asia and the Pacific (Australia, China and Hong Kong separately, India, Indonesia, Japan, Malaysia, Mongolia, Myanmar, New Zealand, Philippines, Republic of Korea, Singapore, Sri Lanka, Thailand, Vietnam);
12 from Africa (Algeria, Botswana, Egypt, Ghana, Guinea, Guinea Bissau, Kenya, Morocco, Nigeria, South Africa, Tunisia);
Six from the Middle East (Iran, Israel, Jordan, Kuwait, Lebanon, Syria).

The surveyed countries represent altogether 83% of the world energy consumption (100% for North America and Western Europe, 68% of Latin America, 73% of Asia, 54% of Africa and 44% of the Middle East). In the sample, 43 countries do not belong to OECD: this sample therefore gives a good representation of non-OECD countries. Among the 29 OECD countries, seven countries are outside Europe (in America, Asia & Pacific).

The survey covers institutional aspects, as well as existing regulations and financial measures. It also covers with a greater focus the selected energy efficiency policy measures mentioned above. The measures considered in the survey are organised as follows :

Institutions and programmes
- Institutions: agencies (national, regional and local), Ministry department
- National programmes of energy efficiency, and GHG abatement and law
Regulations (by sector)
- Efficiency standards for new buildings
- Minimum efficiency standards and labels for household electrical appliances
- Other mandatory regulations: energy managers, energy consumption reporting, energy savings and maintenance
Financial measures (by sector)
- Subsidies for investments and audits, soft loan
- Fiscal measures: tax credit, accelerate depreciation, tax reduction on energy saving equipment
Selected measures
- Audits
- ESCO's
- Incentives for cars
- Measures for solar water heaters
- Energy efficiency obligations for utilities

The results of the survey are summarised in this report and presented by graphs, which show the degree of implementation of the measures in the world geographical regions: Europe, America, Asia (including Oceania), Africa and Middle East . The results of the survey are given with all the detail by country/economy in various tables in Annex 2.

Although energy pricing is an important component of energy efficiency policies, pricing was only partly addressed in the survey. Adequate pricing is a necessary condition for promoting energy efficiency. The first step of any energy efficiency policy should be to adjust energy prices in order to give correct signals to consumers, whilst maintaining incentives for behaviour changes or to acquire energy efficient equipment and technologies. Energy producing countries often maintain low domestic prices, which lead to intensive energy uses, as was seen previously by the high and increasing energy intensities in these countries. A reduction in the subsidies could save energy that could be sold at a much higher price on the international market and bring benefits to these economies. Many energy importing non OECD countries are also protecting their consumers from increase in the oil prices by maintaining subsidised prices for some fuels, which has a negative impact on public budgets, especially in the recent years with soaring oil prices.

Adequate pricing means establishing consumer energy prices that reflect the cost of energy supply, i.e. the long-term marginal cost for electricity, the long-term price of oil products on international markets for fossil fuels. Although most energy planners agree with such objectives, they often face reluctance and opposition from decision-makers outside the energy sector, who fear public resistance and the impact of energy price corrections on the consumer price index. Also, energy is a basic good for which a low price is a condition for low-income households access. This makes actual price adjustments slow or impossible in many developing countries, especially in the household sector.
This part of the report is organised in different sections as follows:

Institutions and programmes;
Regulations;
Financial incentives;
Mandatory audits;
ESCO's;
Incentives for cars;
Package of measures: for solar water heaters;
Energy efficiency obligations for energy utilities
Other measures.