Professional Documents
Culture Documents
Module 03
Presentation Script
Presentation Script
Objectives
The
focus
of
the
lessons
in
this
module
is
energy
efficiency.
You
have
reviewed
both
the
magnitude
of
accessible
cost-savings
from
energy-
efficiency
improvements
and
regulatory
policy
instruments,
including
building
energy
codes.
In
this
lesson,
we
will
cover
informational
and
communication
measures
and
market-based
instruments,
the
importance
and
the
components
of
policy
evaluation,
and
how
regulatory,
informational,
and
market-based
instruments
may
be
deployed
simultaneously
to
hasten
energy-efficiency
improvements.
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Presentation Script
In
a
previous
lesson
you
reviewed
these
broad
categories
of
policy
instruments
that
are
useful
for
energy-efficiency
improvement,
and
focused
on
regulatory
instruments.
In
this
lesson,
you
will
first
explore
information
and
communication
measures.
Later
in
the
lesson,
you
will
look
at
market-
based
instruments.
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Labeling
Schemes
Labeling
is
an
effective
instrument
for
reducing
informational
barriers
to
energy
efficiency.
Performance
labels,
also
known
as
comparative
labels,
convey
to
consumers
the
relative
energy-efficiency
of
appliances,
buildings
or
vehicles.
This
information
is
typically
expressed
on
some
type
of
sliding
scale
that
gives
consumers
basic
information
on
products
energy
consumption
and
operational
cost.
Performance
labels
are
typically
more
effective
if
mandatory
because
they
apply
to
all
products
of
a
certain
class,
whereas
voluntary
labeling
would
allow
manufacturers
to
select
which
products
to
label,
making
them
unlikely
to
draw
attention
to
inefficient
products.
Endorsement
labels
convey
that
a
product
is
a
top-tier
energy
performer.
Endorsement
labeling
is
typically
voluntary
because
manufacturers
have
a
strong
incentive
to
apply
for
a
label,
which
confers
competitive
advantage.
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Presentation Script
Labeling
Schemes
There
are
demand-side
and
supply-side
benefits
to
labeling
schemes.
Labels
give
consumers
an
easy
metric
by
which
to
compare
the
relative
energy
costs
of
different
makes
and
models
of
a
product
theyre
looking
to
purchase.
As
consumer
attention
is
drawn
again
and
again
to
energy-
efficiency
labels,
energy
efficiency
becomes
a
natural
criterion
for
making
purchasing
decisions.
In
turn,
this
creates
incentives
for
manufacturers
to
distinguish
themselves
from
competitors
by
developing
and
marketing
energy-efficient
models.
Labeling
schemes
require
resources,
expertise,
and
coordination.
Commonly,
governments
will
start
out
by
focusing
on
refrigerators
and
air
conditioners
to
gain
experience
before
moving
onto
lamps,
washing
machines,
dryers,
dishwashers,
water
heaters,
boilers,
computers,
rice
cookers,
tires,
and
glazing.
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Presentation Script
Hover
over
the
example
to
review
how
India
developed
its
first
labels.
Performance
vs.
Endorsement
Labels
Here
are
some
examples
of
performance
and
endorsement
labels.
Endorsement
labels
typically
are
designed
to
look
like
a
seal
of
approval
which
they
are
and
performance
labels
are
designed
to
convey
information.
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Presentation Script
Whereas
labeling
attempts
to
make
useable
information
readily
available
to
consumers
as
they
ponder
investment
decisions,
public
awareness
campaigns
more
closely
resemble
advocacy
advocacy
aimed
at
consumers
to
convince
them
to
make
smarter
energy-use
decisions,
lifestyle
changes,
or
investments.
Awareness
campaigns
and
labeling
are
very
complimentary
because
different
consumers
respond
to
different
types
of
messaging.
Both
instruments
target
upwards
of
20%
energy
savings,
which
can
be
achieved
through
small
changes
in
consumer
behavior.
Take
a
moment
to
review
examples
of
campaign
media
and
tactics
used
in
South
Africa,
Cuba,
Chile,
and
China.
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Having
covered
information
and
communication
measures,
we
now
turn
to
market-based
instruments,
including
price
instruments
and
quantity
instruments.
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Presentation Script
Market-based
Instruments
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Presentation Script
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Presentation Script
Fiscal
incentives
reduce
the
tax
burden
on
consumers
that
make
energy-
efficiency
investments.
Fiscal
incentives
can
take
the
form
of
tax
credits
or
tax
deductions,
or
reductions
in
VAT
or
import
duties
for
energy-efficient
technology.
Governments
can
also
encourage
industry
to
invest
in
efficiency
upgrades
by
accelerating
the
depreciation
schedule.
Fiscal
incentives
are
more
economically
efficient
than
investment
subsidies
because
they
apply
to
the
whole
economy
and
are
simple
and
cheap
to
monitor
and
administer.
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Presentation Script
Economists
tend
to
rank
fiscal
incentives
as
superior
to
subsidies.
The
upside
of
subsidies
is
better
market
penetration
of
subsidized
technologies.
Subsidies
helped
to
mature
the
market
for
solar
water
heating
in
Israel
and
Greece.
One
downside
to
subsidies
is
potentially
wasting
resources
on
free
riders
in
other
words,
people
who
would
have
otherwise
made
the
investment
without
a
subsidy.
There
are
risks
to
mitigating
against
free
riders
with
rigorous
application
procedures,
because
participation
by
the
target
demographic
will
also
decrease.
Another
downside
is
the
perverse
incentive
for
manufacturers
and
installation
contractors
to
hike
their
prices
in
response
to
a
subsidy
program.
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Presentation Script
In
contrast,
fiscal
incentives
apply
to
the
whole
economy
and
are
simpler
and
cheaper
to
administer.
Instead
of
policy-makers,
fiscal
incentives
let
the
market
pick
technological
winners.
Quantity
Instrument:
Energy
Savings
Obligations
Energy
savings
obligations
require
energy
companies
to
conduct
energy-
efficiency
improvements
with
their
customers.
There
are
a
few
key
areas
of
variation
in
the
design
of
this
policy
instrument.
First,
the
nature
of
energy
companies
obligation
can
either
be
expressed
in
terms
of
required
annual
energy
savings
or
required
annual
investment
in
energy
efficiency.
Further,
the
obligation
can
be
applied
to
either
energy
suppliers
or
distributors.
For
obligations
expressed
as
total
required
energy
savings,
two
crucial
determinations
are,
first,
which
energy-efficiency
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Presentation Script
investments
are
eligible,
and
second,
how
much
energy
savings
will
accrue
toward
obligations
from
eligible
investments.
Hover
over
the
Example
from
Brazil
to
learn
more.
Benefit
of
Energy
Savings
Obligations
for
Developing
Countries
Energy
savings
obligations
commonly
rely
on
so-called
deemed
energy
savings
values.
Once
an
investment
is
made
eligible
--
for
example,
compact
fluorescent
lamp
installation
the
regulator
will
also
publish
a
deemed
energy
savings
value,
based
on
testing
data,
which
tells
energy
companies
exactly
how
much
energy
savings
will
accrue
toward
their
obligation
from
each
CFL
they
install.
This
practice
makes
monitoring
and
compliance
fairly
simple
because
it
requires
counting
how
many
investments
were
made
instead
of
calculating
their
energy-savings
impact.
The
relatively
low
cost
of
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Presentation Script
monitoring
and
compliance
is
one
reason
why
energy
savings
obligations
may
be
a
promising
instrument
for
developing
countries.
Another
reason
that
ESOs
are
promising
is
because
efficiency
investments
are
coordinated
by
well-resourced
energy
companies
with
consumer
networks,
instead
of
by
government.
Policy
Evaluation
and
Improvement
Evaluating
the
performance
of
policy
instruments
once
implemented
is
critical.
The
US
EPA
defines
policy
evaluation
as
the
process
of
determining
and
documenting
the
results,
benefits,
and
lessons
learned
from
an
energy-
efficiency
program.
Evaluation
reveals
which
instruments
are
successful
and
which
instruments
need
corrective
action.
Evaluation
is
crucial
because
results
are
not
readily
apparent.
In
effect,
success
is
measured
by
the
amount
of
energy
that
was
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Presentation Script
Different
policy
instruments
address
different
market
failures,
behavioral
barriers,
and
government
failures.
Governments
have
a
role
in
overcoming
each
failure,
and
there
are
multiple
policy
instruments
that
might
be
used.
Market-based
instruments
can
be
used
to
correct
prices.
Labeling
allays
informational
market
failures.
So
too
do
designated-consumer
regulations,
which
also
nudge
behavior.
Awareness
campaigns
are
designed
to
nudge
behavior.
Government
failures
require
policy
evaluation
to
overcome.
In
sum,
a
package
of
policy
instruments
should
attempt
to
address
each
of
the
major
sources
of
the
energy-efficiency
failure.
Hover
over
the
Example
from
Thailand
to
learn
more.
Summary
of
Key
Messages
Page 20 of 22
Presentation Script
The
first
lesson
in
this
module
covered
regulatory
instruments.
This
lesson
looked
at
information
and
communication
measures
and
market-based
instruments.
One
key
takeaway
from
this
lesson
is
that
in
order
for
government
policies
to
overcome
the
diverse
market
barriers
to
realizing
energy
efficiency,
a
policy
package
is
required
that
includes
regulatory
instruments,
information
and
communication
measures,
and
market-based
instruments.
Information
measures
help
consumers
make
smarter
decisions
and
build
capacity
for
energy
efficiency.
Market-based
instruments
incentivize
energy-efficiency
improvement
or
allow
flexibility
in
meeting
required
efficiency
improvement.
A
last
but
important
takeaway:
policy
evaluation
and
improvement
is
critical
and
must
be
planned
before
policy
implementation.
Key
References
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Presentation Script
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