EU Policies and Regulation on CO2, Renewables and Energy Efficiency: A Critical Assessment of Recent Experiences - Green Energy and Efficiency: An Economic Perspective - page 43

Fig. 12 Main regulatory instruments for improving energy ef ciency Source own records

ciency are
due to the application of policies and regulatory instruments to overcome barriers
and correct the market failures that prevent investments in ef

In fact a large proportion of the improvements achieved in energy ef

ciency from attaining
optimum levels. The huge variety of regulatory instruments that have been devel-
oped in the European context can be grouped into four main areas: economic
instruments affecting price and quantity, measures, mea-

sures designed to enhance information, awareness and the possibilities available to
consumers, and

“ command-and-control ”

.
Economic measures based on the introduction of price signals are implemented
by governments in order to attain an energy ef

“ other measures ”

ciency target, under the assumption
that the price signal will have a major impact on consumption. Highlights of these
measures include prices that re

ect the costs of energy and external issues, energy
and environmental taxation and rede ning the tariff structure.

The second group of economic instruments involve setting ef ciency targets. This

makes them quantity-based economic instruments in which governments impose
targets on distributors and/or energy suppliers to get them to bring down their
customers ' consumption within a certain period. In general, the companies them-
selves can decide what procedures to carry out in order to meet these obligations.
This type of instrument is used in various EU countries (UK, France, Italy, etc.) and
was granted a special role in the recently passed Energy Ef

ciency Directive. A more
detailed analysis of these instruments is therefore presented in this section.
One instrument is described in the literature in the section on “ command-and-

control : it consists of setting minimum compulsory norms and standards for

consumer equipment (vehicles, buildings, electrical appliances and other electronic
devices). This is usually considered to be a highly suitable measure for achieving
structural improvements in energy ef

”

ciency and it has been rolled out to a high