Policy Instruments to Foster Energy Efficiency - Green Energy and Efficiency: An Economic Perspective - page 90

Policy Instruments to Foster Energy
Efciency

Anil Markandya, Xavier Labandeira and Ana Ramos

Abstract In this chapter we start by enumerating the reasons why progress in
realizing the energy ef

rms and
households. Then we turn to the role of policy in moving agents closer to an
optimal level of energy ef

ciency potential has been so limited both for

ciency. Governments have a range of instruments at their
disposal for doing so and while some of them have been successful others have not.
Lessons can therefore be learnt from the experience in implementing these different
measures. The paper ends with some thoughts on how policies can be made more
effective.

1 Introduction

An important part of the actions required to move to a low carbon economy is an
increase in the amount of economic output we get out of a unit of energy — i.e. an

increase in energy ef ciency. A recent report from the European Parliament for

climate end energy policies [ 24 ] notes that the EU has a cost-effective potential for
energy saving achieved through energy ef ciency of 40 % in the whole economy

(61 % from the residential sector, 41 % from transport, 38 % from the tertiary
sector, and 21 % from industry). It also notes that a signi

cant percentage of this

has not been realized — 80 % in the case of the residential sector and 50 % in the

This chapter was prepared with the economic support of the Spanish Ministry of Economy
and Competitiveness through its research project ECO2009-14586-C2-01 (Xavier Labandeira
and Ana Ramos) and Fundaci ó n Iberdrola (Ana Ramos). We thank the editors, Alberto Gago,
and Pedro Linares for their useful comments and suggestions. The usual disclaimer applies.