Green Energy, Efficiency and Climate Change: An Economic Perspective - Green Energy and Efficiency: An Economic Perspective - page 10

s decision of engaging in a long-term policy of sub-
stitution of all kind of nuclear energy for energy obtained with other technologies, as
a consequence of the Fukushima accident in 2011, constitutes an example of these
changes. The uncertainty about future events and the large damages are compelling
reasons for the Japanese government that has decided to use the precautionary
principle as a basis for energy policy. This has been something inevitable and
demanded by citizens.
There are also other examples (the Germany

The Japanese government '

s nuclear phase-out policy, for
instance) in which energy policies have changed in a quite a drastic way. The
reduction of the subsidies to renewable energies is also very illustrative. Some
governments have decided that the amount needed to maintain the renewable
energy alternative is too expensive as to be sustainable and have decided, as in
Spain, to change its policy regarding subsidies, which has generated uncertainties
and losses to many investors in the sector. This change has confused the energy
sector and investment in renewables, in particular solar energy, is experiencing an
important decline. This constitutes an example in which energy policy is subject to
uncertainties that lead to unexpected changes because the objective, an increase in
the renewable share in the energy mix, has resulted to be more expensive than was
planned.
Finally let us note that, as the implications of energy use affect many countries
and regions, there is a need for good energy efciency indicators. 4 Without them, it
is impossible to have consistent and comparable evaluations of energy ef

'

ciency
situations in different countries. These comparisons are needed when negotiations,
regarding the issue about which is the best way to curb GHG emissions, take place
between different parties.
Fortunately, not every aspect of energy policies is subject to uncertainties. There
are also issues for which some sort of consensus exists and provide some certainties
on which to base energy policy. For example, Jaffe et al. [ 17 ] argue that when
subsidies and tax credits are the instruments used to achieve energy ef ciency,

consumers that may have purchased an ef cient product even in the absence of the

subsidy, might receive public money. Consequently, it may be better to design
policies that increase energy prices and diminish the cost of technological alter-
natives generated through innovation. This combination may be effective to pro-
mote the use of more energy ef

cient technologies. The existence of behavioral
barriers also suggests the need to take a different route on some policies. Putting the
attention in factors such as consumers

education is one of these different routes.
In the past few decades a number of different instruments have been used to
promote energy ef

'

ciency: taxes, market for permits of CO 2 emissions, subsidies,
tax credits and technological innovation. As in other areas of environmental eco-
nomics, the analysis of whether or not command and control policies in the form of

4 Fortunately, recent advances are being made to provide good energy ef ciency indicators by the
World Energy Council or the International Energy Agency at the world level and by the ODYSSE-
MURE Project and Fundaci ó n Repsol at the European level.