ECN publication
Strategies and instruments to promote energy efficiency indeveloping countries: project working paper 5: effectiveness ofindustrial energy conservation programmes in IEA countries [ECN-C--94-113]
Published by: Publication date:
ECN Policy Studies 1995
ECN report number: Document type:
ECN-C--94-113 ECN publication
Number of pages: Full text:
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The focus is on IEA countries' industrial energy policy instruments,being information programmes, financial incentives and codes and regulations. The results of these policy instruments in IEA countries may yield indications for application in developing countries. The instruments are embedded in a general energy policy environment: organization of states, ministerial bodies responsible for energy, energy legislation and the international energy context. Policy design is implemented with policy instruments among which energy pricing, tariff structure, and taxation are the most important ones. Major conclusions for developing countries on energy market intervention instruments, as applied in IEA countries, are: (a) the application of financial incentives in industrial energy conservation is generally cost-effective, but relatively expensive from the state point of view. Grant programmes should be applied only in case of the few largest energy consuming industries; (b) information programmes constitute the cornerstone of all policy programmes and are valuable in ensuring the success of other types of policy measures. Demonstration projects, training and education are possibly the most effective ways to reach structural effects; (c) regulations and standards can be supportive at achieving a minimum level of energy conservation, but do not guarantee that the optimal level will be attained. Standards and regulations need to be enforced which is rather expensive and which presupposes the availability of high-quality experts with control being exerted in industry and at the national borders. The conclusions on effectiveness of energy conservation policy instruments are the basis for an expansion of the role these instruments can play in developing countries. The working paper is concluded with some policy priorities which can be derived from the IEA experiences and the experiences described in the regional papers, notably the Latin American and Asian papers. The final conclusion may be that the market should be allowed to play a major role, but within the boundaries set by governments usually confronted with other, even more compelling needs.

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