ECCJ / Small Group Discussion Presentation / Group B

Instruments towards EC

Environmental effectiveness

EE&C targets or goals are not specified and methodologies not clearly defined.

Several countries adopt legislation based on existing legislation in the other models or other developed countries. These reduction levels may be desirable but often are not achievable in a country.

The governance structures needed to implement and enforce the legislation are weak.

Funds are often insufficient to implement and enforce legislation and monitor impact.

The economic cost per unit of energy reduced is generally higher for legislation than for economic instruments. This is because money is needed for authorities implementing, regulating and monitoring the legislation.

Many governments allocate insufficient funds for enforcement of legislation. As a result the total costs of the legislation are lower, but the energy reduction is also low. Therefore the economic efficiency is further reduced.

The budgetary impact from legislative instruments is zero, except from revenue from penalties for non-compliance.

Ability to implement and enforce

Legislation is often difficult to enforce in practice because of vague and unrealistic requirements, weak governance structures and insufficient funds as described earlier.

Energy efficiency legislation may conflict with economic/social policies, e.g. fuel subsidie

Support from stakeholders

Government generally supports legislative instruments because it is what they are used to. But financial and industrial ministries are more likely to oppose legislation if it has a negative impact on the economic viability of industry or the country.

Industry opposes legislation that costs them money or time.

Environmental NGOs are supportive of legislative instruments if properly enforced.

The public supports legislation if they are not adversely affected by it or if they also benefit from it, i.e. the legislation addresses issues of public concern e.g. climate change. However, they may oppose legislation if industry passes on the cost of compliance onto the consumers through their production or services or if it could lead to economic slowdown or unemployment.

Environmental effectiveness

Uncertain because it is up to industry to decide if they want to participate in, for example a program, and there are no legal or financial consequences of in action.

The direct impact on energy reduction by the voluntary instrument. For example, the impact of an R&D or training program on energy reduction is mostly visible in the long term.

Potential revenues for the government can be found in the transition from voluntary to Mandatory.

Ability to implement and enforce

Voluntary instruments can never be enforced due to their voluntary nature, however industry can be put under pressure to participate or comply depending on the commitment made by them.

Support from stakeholders

Government supports voluntary instruments because they can avoid confrontation with industry, and as long as government costs are manageable.