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Improvement of energy efficiency is one of the important options for reducing greenhouse gas emissions. According to the Third Assessment Report of the Intergovernmental Panel on Climate Change, hundreds of technologies for improving the end-use energy efficiency make up more than half of the global potential for greenhouse gas emission reduction in the short and medium term (2010 -2020). (IPCC, 2001; see also WEA, 2000). An important next question is how these options can actually be deployed. More specifically, one may ask what role governments can play by using policy instruments to promote the deployment of energy efficient technologies. In this introductory Chapter, we will first set out the aim of the research described in this book. Then we will discuss the various policy instruments that may playa role in energy-efficiency improvement. Next the various aspects important for characterising policy instruments will be discussed and the various disciplinary approaches are listed. Finally, the outline of the complete book will be given.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Abstract
Improvement of energy efficiency is one of the important options for reducing greenhouse gas emissions. According to the Third Assessment Report of the Intergovernmental Panel on Climate Change, hundreds of technologies for improving the end-use energy effiiciency make up more than half of the global potential for greenhouse gas emission reduction in the short and medium term (2010 – 2020). (IPCC, 2001; see also WEA, 2000). An important next question is how these options can actually be deployed. More specifically, one may ask what role governments can play by using policy instruments to promote the deployment of energy efficient technologies.
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Chapter 2. A Framework for Analysing the Adoption of Energy-Efficient Technologies

Abstract
Associated with economic development are increases in energy use and harmful emissions. Changes in total emissions can basically be decomposed into three components. The first component is associated with macroeconomic growth that, ceteris paribus, results in increased emissions. The second component is associated with structural change. As economies develop, their sector composition changes. Sectors are characterised by their own intensity and development of emissions over time. Changes in sector composition therefore, ceteris paribus, imply changes in macroeconomic emissions. The final component is technological change. Technological improvements tend to result in reduced emission-output ratios and thus, ceteris paribus, decrease macroeconomic emissions. Over the last decades, world-wide emissions have increased tremendously. These developments have, among others, resulted in concrete policy goals set out in the Kyoto protocol. These goals have prompted countries to develop policies oriented towards sustainable development, sustainable energy use and a reduction of emissions, such as CO2, CH4 and N2O. Adoption of energy-efficient technologies by firms is one of the most important and promising means to reach these environmental goals (see, for example, de Groot, 1999a).2 A key question in the development of policies is therefore how firms respond to policy measures aimed at stimulating adoption of energy-efficient technologies.
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Chapter 3. Subsidising the Adoption of Energy-Efficient Technologies: An Empirical Analysis of the Free-Rider Effect

Abstract
Subsidies are intensively used to steer the adoption of energy-efficient technologies. Their cost-effectiveness is disputed for a variety of reasons. First, in a competitive economy, subsidies increase aggregate emissions, which is essentially caused by the income transfer implied by the subsidy (and the associated entry of new firms or enlargement of existing firms). Subsidies — in other words — do not provide an incentive to reduce aggregate utilisation of energy. Taxes are in this context a more effective instrument in the sense that they result in declining aggregate emissions (for example, Baumol and Oates, 1988). Second, taxes generate revenues that can be used to reduce other distortionary taxes and to increase welfare (see the literature on the double dividend as discussed in, for example, de Mooij, 1999). Third, subsidies involve administration costs that tend to be larger than those for tax measures. These costs increase with the specificity of the subsidy program. Fourth, subsidies are often considered to be inefficient since they involve free riders. In this context, free riders are defined as agents who make use of the subsidy, but would have undertaken the subsidised action anyway — and without any delay (see, for example, Train, 1994). We will use this definition throughout this chapter. Because of these free riders, large public expenditures can be required per unit of effect, raising an issue of feasibility of granting subsidies in the presence of fiscal constraints (for example, Jaffe et al., 2000).
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Chapter 4. Energy-Efficiency Standards

Abstract
The regulatory or ‘command and control’ approach has often been the preferred way of achieving objectives in environmental policy, even though the economic approach is becoming more important. The command and control approach consists of the promulgation and enforcement of laws and regulations, prescribing objectives, standards and technologies polluters must comply with. This preference for direct regulation is due to the theoretically high degree of precision and effectiveness possible for this type of instrument. However direct regulation can entail a large number of drawbacks and problems.
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Chapter 5. Negotiated Agreements

Abstract
Negotiated agreements — also often indicated as voluntary agreements — can be defined as ‘agreements between government and a sector in the national economy to facilitate voluntary action with a desirable social outcome, encouraged by the government. This action is undertaken by the participant, based on the participant’s self-interest’ (OECD, 1996). Once the agreement has been negotiated parties are bound to (fixed) procedures and rules. Negotiated agreements on energy effiiciency in firms have become popular in many OECD countries. They exist in some form in at least in Australia, Canada, Denmark, Finland, Germany, the Netherlands, the United Kingdom and the USA (TEA, 2001) .
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Chapter 6. Government Intervention Strategies in Stimulating the R&D of Energy-Efficient Technologies

Abstract
Thus far, the attention in this book was directed to stimulating the adoption of commercially available technologies. Such options may prove sufficient to reach short and medium term targets. Reaching longer term targets, like those for a period of 50 to 100 years ahead requires not only the further adoption of the technologies mentioned, but also the development and adoption of innovative technologies. Blok et al. (1996a), De Beer (1998) and Martin et al. (2000) have shown that the long-term potential for energy-efficiency improvements in various energy-intensive manufacturing industries is considerable.
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Chapter 7. Instrument Choice and Energy-Efficiency Improvement by Firms: An Empirical Analysis

Abstract
Environmental quality and resource management has become a prominent challenge in a modern economy. The complexity involved has prompted a series of diverse policy initiatives, ranging from market oriented instruments (like taxes, subsidies and tradeable permits) to command and control measures (ranging from voluntary agreements to standards). Some of these instruments were illustrated in Chapters 3–6 of this book and discussed in terms of their effectiveness and desirability when considered in isolation (see Tietenberg et al., 1999, for a general overview). In practice, many policy initiatives are hindered by much uncertainty (see, for example, Roberts and Spence, 1976, and Adar and Griffin, 1976), so that a clear choice for price-based instruments — as opposed to quantity-based instruments — is difficult to make.
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Chapter 8. Policy Instruments for Technology Adoption: A Model for Analysing the Diffusion of Energy-Efficient Technologies

Abstract
As we saw in previous Chapters, analysing the effectiveness of policy instruments in achieving improvements in energy-efficiency is a difficult task. It requires a careful analysis and description and a deep understanding of decision-making processes at the firm level and at the same time a careful analysis of general-equilibrium mechanisms that are especially relevant for understanding the economy-wide effects, including rebound-effects, etc.
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Chapter 9. Conclusions

Abstract
Energy-efficiency improvement — defined as the reduction of the energy use per unit of human activity — is an important option for the reduction of greenhouse gas emissions. Much was already known now about the technoeconomic potentials for energy-efficiency improvement in industrialised societies. The question in this book was how government can actually stimulate energy-efficiency improvement.
Kornelis Blok, Henri L. F. de Groot, Esther E. M. Luiten, Martijn G. Rietbergen

Backmatter

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