by Dean Anderson
| 1. Preface
2. Progress indicators
3. Executive summary
4. Trends in energy intensity
8. Trends in energy efficiency
Some countries, most notably Japan, have had government
sponsored energy efficiency programmes in place since the oil shocks of
the 1970s. However, others have only begun very recently to address energy
efficiency in a serious way as part of their climate change programmes.
In fact, most countries and industries have 'resisted' implementing even
those 'no-regrets' energy efficiency measures shown to be cost-effective
and to improve economic performance. There are several reasons for this:
First, there is the widespread impression that electricity and fossil
fuels are cheap, since prices have been stable for a number of years and
are not much higher in real (inflation-adjusted) terms than they were
a half century ago. Second, companies (and other organisations) may avoid
investments in which the payback is longer than two or three years and
would 'tie-up' capital. Third, companies may just not be aware of the
potential for energy and cost savings, since this is not a major focus
or 'success factor' of their business. Fourth, companies often view efficiency
measures imposed by government as unwanted, intrusive regulation. Because
of their unpopularity or low priority, many government efficiency programmes
are under-funded or prone to cut-backs when budgets are tightened, as
they frequently are. In several countries a further obstacle to progress
is divided responsibility/jurisdictional conflicts between federal and
local governments. However, the trend is definitely towards more systematic
approaches to improved energy efficiency through measures ranging from
informational programmes, to subsidies, to toughened standards.
Australia - The governments (Commonwealth, state and territorial) have only recently adopted planning targets and begun to support energy efficiency programmes. The 'Greenhouse Challenge', initiated in 1995, is a programme of voluntary agreements with industry and communities. Other programmes addressed at industry are: (1) energy labelling and minimum energy efficiency standards for industrial equipment; (2) government support for energy audits by industrial and commercial enterprises; (3) financial assistance for the preparation of environmental management plans; and (4) tax incentives for investment in new, more energy efficient plant and equipment. In the residential, commercial and institutional sectors, four measures are aimed at improving energy end-use efficiency: (1) mandatory labelling of major domestic electrical appliances; (2) minimum energy performance standards for domestic electrical appliances (to be introduced); (3) agreement in principle to adopt consistent nation-wide energy efficiency and insulation standards for residential structures; and (4) introduction in 1998 of a voluntary national code covering the design and operation of new and refurbished commercial buildings, including heating, cooling, and lighting systems.Country reports
Austria - In 1995 the Parliament approved higher building code standards covering the insulation of new buildings and the efficiency of heating equipment. These must be coordinated with the Laender (states), which have jurisdiction over building codes. Laender governments currently provide small subsidies for energy efficiency retrofits in buildings. The federal government plans to implement the EC directive on household appliance energy labelling. It is also offering an energy audit service in collaboration with the Energy Consumer Association.
Belgium - Though the federal government is responsible for national environmental targets, energy efficiency is the responsibility of the three regional governments, which have introduced various financial incentives for building retrofits. The three regions also promote the rational use of energy by municipalities and other local public institutions. The national climate change plan proposes to make energy audits, presently being supported as a diagnostic tool, obligatory for firms receiving investment subsidies under energy efficiency programmes. The plan also proposes that the higher insulation standards currently in force in Flanders be extended to new residential buildings in Wallonia and Brussels and that commercial buildings be subject to stricter regulations. The introduction of financial incentives encouraging households and institutions to improve on legally required insulation standards is also planned. The government intends to enforce the EC directive on household appliance labelling.
Canada - Since 1992 the federal government has been implementing a series of energy efficiency measures in conjunction with its climate change programme. Measures include: (1)
new energy efficiency standards and labelling requirements for appliances and equipment - performance standards are provided for 22 products and energy consumption labelling required for 7 products, with further standards under development; (2) a voluntary certification programme for new houses (R-2000 Program), with the standards to serve as a benchmark for the residential building industry; (3) planned amendments to the National Building Code calling for higher efficiency standards in new commercial and residential buildings; (4) a voluntary programme to promote and monitor energy efficiency in mining and manufacturing, with specific voluntary targets to be developed for the major industrial sectors; and (5) the Federal Buildings Initiative and Energy Innovators voluntary programmes, designed to help federal departments to undertake building retrofits to improve energy efficiency. Over 90 projects, representing a total investment of $200 million, are currently being implemented in 2,500 federal buildings. Provinces are also pursuing retrofit programmes for their public buildings and a pilot retrofit programme of federal support for municipal building retrofits is underway.
Denmark - Danish homes are relatively efficient, and central heating is prevalent, partly because of a subsidy programme for water-based systems. The government is undertaking a programme of voluntary agreements with industry in which it asks companies or groups of companies to reduce energy consumption by a certain percentage over a defined period of years. The government has adopted an initiative for encouraging existing buildings with electric heating to convert to district heating or natural gas heating, the purpose being to reduce the use of electricity, which is predominantly generated from coal. Denmark requires annual inspections of gas- and oil-fired burners in buildings as well as heat inspections of residential housing units. Since 1992 energy management and annual reporting of energy consumption have been required of every public building. The programme Energy 2000 calls for changes in building codes to reduce net heat demand in buildings 50% by 2005. The new codes will set limits on electricity consumption for ventilation and will require low temperature heating, such as condensing boilers, solar energy, heat pumps or, preferably, connection to district heating (if available). The government plans to implement CEC appliance labelling directives. It also proposes mandatory energy efficiency labelling of cars and the voluntary labelling of products not covered by CEC directives.
Finland - A voluntary agreement on energy conservation signed in 1992 between the Ministry of Trade and Industry and the main industrial organisations specifies an objective of lowering heat energy consumption 2-15% and power consumption 8-10% by 2005. The government has established a service to develop energy auditing methods as well as to train and certify auditors. It is implementing two programmes to develop new industrial energy efficient technology: (1) 'Sustainable Paper', aimed at simplifying manufacturing processes, developing control systems and new paper industry products that require the least possible energy, and developing for export energy efficient paper manufacture equipment; and (2) 'Sula 2, aimed at achieving world leadership in reducing the energy consumption of specific processes in the base metals industry, including steel production and zinc, copper and nickel processing. Examples of government programmes in the residential and commercial sectors include: (1) a further tightening of the insulation regulations in the building code requiring use of more efficient windows and making heat recovery of exhaust air compulsory (to take effect at the end of 1996); (2) the adoption of energy labelling for household refrigerators and freezers to comply with CEC directives; and (3) an informational and technology procurement programme aimed at consumers and small and medium-scale businesses (MOTIVA). Also, the Public Sector Energy Conservation Programme, adopted by the government in 1992, aims to reduce energy consumption in facilities of the national government and municipalities and has set a target to reduce heating energy use 10% by 2005 and electrical equipment use by 15% from their 1990 levels. Voluntary agreements have been signed by the national government with local authorities including the Association of Finnish Local Authorities and the City of Helsinki.
France - The use of gas and electricity for heating is increasing while that of oil and coal is decreasing. In the residential/commercial sector electricity use has been increasing at over 5% per year in recent years mainly because of electric space and water heating, which EdF (the monopoly electric utility) has been promoting. Today these markets are saturated, but EdF is promoting air conditioning. There have been progressive revisions in building efficiency standards since 1974, making France one of the leading countries in promoting energy efficiency in dwellings and commercial buildings. For new houses the thermal regulations will be further tightened in 1997, requiring low emission double glazing, which reduces heating requirements by 5-10%. Efficiency support measures include: (1) financial assistance for R&D support and demonstration projects; and (2) fiscal incentives for energy efficient equipment and CHP units, including amortisation authorised over 12 months and various tax incentives. ADEME (the environment ministry) makes fiscal incentives available to industry for sound energy management including accelerated depreciation for capital investments in energy saving and CHP and tax relief on profits and capital gains made from leasing energy saving equipment. New energy efficiency regulations will go into effect in July 1997 for non-air-conditioned buildings and in January 1999 for air-conditioned ones.
Germany - Energy consumption in the commercial and household sectors in West Germany increased 20% between 1970 and 1987 as the utilities promoted the use of electric heating and appliances but is today not much higher than in 1987. Energy efficiency in eastern Germany is low relative to western Germany, the main problems being insufficient insulation and inefficient heating units. In 1995 an amendment to the Thermal Insulation Ordinance was passed, setting standards aimed at cutting heating requirements in new buildings 30% and also supporting retrofits in existing buildings. In 1994 the requirements for heating and hot-water systems were tightened, and the government plans to implement CEC guidelines for hot water boilers. The government subsidies a programme of on-site advice by engineers on thermal insulation, heating system technology, and use of renewable energies. It offers tax breaks of up to 50% of the cost of modernising commercial buildings and rental property and of up to 10% for residences. It also offers low interest (subsidised) loans for the modernisation/repair of existing residences located in eastern Germany as well as for 'low energy homes', ones whose annual heating energy requirements are at least 25% below those set out in the ordinance on thermal insulation.
Greece - Energy efficiency is mainly addressed through the Second Support Framework of the EU (1994-98), which provides for co-funding. However, there have been delays in implementing specific programmes, which include energy audits, education and training initiatives on energy efficiency, voluntary agreements with energy intensive industries and technical assistance to small and medium sized industries in energy saving and rational energy management. Energy conservation measures include proposed building insulation regulations, promotion of new technologies in appliances and equipment, the use of new construction materials, the incorporation of active or passive solar systems and development of new building standards. Official action is being undertaken to comply with CEC directives on standards for the efficiency of new hot water boilers and the labelling of domestic appliances. Subsidies are planned for the use of new construction materials and the incorporation of active or passive solar systems. The recent introduction of piped natural gas is expected to gradually reduce energy use for space and water heating and air-conditioning.
Ireland - The government is implementing a variety of programmes to encourage energy conservation in the residential, commercial and industrial sectors. Revised building regulations which came into force in 1992 are expected to reduce space heating requirements in new buildings by as much as 20% by 2000. Insulation standards were made more stringent and measures were required to limit heat loss from hot water storage vessels as well as pipes and ducts in new buildings. In 1994 efficiency regulations came into operation implementing CEC directives for new hot water boilers fired with liquid or gaseous fuels. Regulations are being drafted for energy labelling of household electric refrigerators and freezers. In 1993 the Irish Energy Centre (IEC) was established to promote industrial energy efficiency. It provides grants for audits and energy efficiency investments recommended by the energy audits and organises information campaigns and holds conferences on such subjects as energy efficient lighting, energy efficiency in buildings and CHP. The government is also taking a more pro-active approach to electricity demand side management (DSM), requiring ESB, the monopoly utility, to institute DSM programmes and to weigh the cost of energy savings against supply side increases using a loose form of least cost planning.
Italy - A 1991 law (Law 10) has provided the main thrust of energy end-use efficiency policy. It earmarks funds to partially subsidise investments in energy efficiency, CHP and district heating. However, actual funding has been minimal and the programmes are regarded by companies as ineffective. Law 10 also sets efficiency standards for new homes, provides incentives for refurbishing existing buildings, and encourages the introduction of more efficient appliances and equipment. Government spending on efficiency programmes and CHP was only at the level of 30% of the funds allocated at the end of 1994. Energy efficiency standards for appliances, equipment, and motors are 'under development' but not yet in effect. The electric utility ENEL has been sponsoring programmes to encourage use of solar water heaters, power factor correction and heat pumps but is not interested in DSM. In order to encourage DSM, environmental groups are lobbying for separating generation from distribution in the industry restructuring in order to introduce a pricing structure that rewards generating companies for implementing DSM rather than for maximising kWh sales.
Japan - The Energy Conservation Law (ECL) was amended in 1993 to toughen standards and introduce mandatory reporting. The aim of ECL is to reduce domestic energy consumption by at least 1% annually. ECL sets a number of standards for industry, residential and commercial buildings and appliances; these are 'judgement standards', that is not mandatory. However, under the 1993 amendments, if an energy user fails to meet the standard by a 'considerable' margin, it may be instructed to prepare an 'energy use rationalisation plan'; if it fails to do so, it may face public announcement of the failure and, as a last resort, an order to prepare an energy plan under threat of a penalty. The 1993 Energy Conservation and Recycling Assistance Law (ECRAL) authorises low-interest loans, special tax measures and loan guarantees to businesses which voluntarily take energy efficiency measures exceeding ECL standards. Specific tax incentives, a credit against income tax equal to 7% of the acquisition cost and an accelerated depreciation allowance equal to 30% of the acquisition cost, are offered for investments in heat pumps, floor heaters, CHP systems, district heating and cooling systems, high efficiency electric trains, low emission vehicles, energy-efficient textile manufacturing equipment, solar power systems, small- and medium-size hydro generators, and equipment for producing recycled paper and plastics. In addition, low-interest (subsidised) financing is provided for construction of commercial and residential buildings incorporating energy conservation features; development of plants generating electricity from refuse-derived fuel; installation of systems utilising waste water heat; acquisition by government agencies of CH4 and natural gas-fuelled vehicles and vehicles with hybrid engines; and installation of solar energy systems in residences. In 1992, MITI requested 87 major industrial organisations to provide corporate environmental plans, including energy conservation targets. By late 1994, 350 companies and four associations representing 60% of manufacturers with 300 or more employees had submitted voluntary plans.
Luxembourg - In the interest of avoiding costly energy imports, ARBED, Luxembourg's major steel producing company, has long supported energy efficiency and conservation measures. The restructuring of the steel industry towards electric arc furnace production is expected to cut in half the amount of energy required per unit of steel produced. By the end of 1997, the use of blast furnaces in Luxembourg's steel industry will have come to an end. However, partly as a consequence of this, industrial electricity demand is expected to almost double between 1990 and 2010. Energy efficiency initiatives by industrial companies are supported by government financial incentives and support programmes. The 1993 framework law on economic development and diversification offers firms a 25% subsidy for investments in emission reducing activities, energy efficiency measures or renewable energy sources. Under the energy efficiency law, a regulation imposing mandatory energy audits on industrial enterprises consuming more than 3GWh a year is to be introduced, potentially affecting between 300 and 400 firms. To facilitate the process, grants already offered for energy audits will be increased from 30% to 50% of the cost.
Netherlands - Energy efficiency measures are taken seriously, with targets set for different economic sectors typically requiring 20% improvements. The overall target is an average increase in energy efficiency of 1.7% a year between 1990 and 2000 as well as sectoral targets for post-2000: 40-43% for the electricity production sector; 19% for industry; 10% for transport; 23% for the residential and commercial sector; and 26% for agriculture. The longer term goal is to improve the energy efficiency of the economy a third between 1995 and 2020. However, as part of wider budget cuts, the new government which came into power in 1994 reduced its funding for energy efficiency subsidies and research by around 45%. It is intended that these cuts will be partly offset by the new regulatory energy tax (see below) and a greater emphasis on voluntary agreements with industry and the utilities. The emphasis on voluntary agreements reflects the Dutch tradition of policymaking by consensus. Twenty-eight so-called long term agreements (LTAs) are currently in force with different industrial sectors, covering 85-90% of energy consumption by industry. Under an LTA, a participating firm is not assigned a specific targets, but rather required to draft an energy savings plan and calculate its energy efficiency index annually according to a prescribed methodology. The government compiles and reports on the results received, thus allowing the regular review of energy efficiency progress. The LTA approach allows individual companies to decide for themselves how they will meet their objectives. As of 1996, there were 28 LTAs in force, involving around 900 firms, with discussions under way with five more industrial branches to bring coverage up to 90% of industrial energy consumption. The government's aim is to have LTAs in 35 industrial branches. Additional support and incentive programmes are in place. The energy conservation and technologies subsidies scheme (BSET), for example, provides subsidies for investments in energy conservation technology which would otherwise not be economically viable. Companies can also receive a subsidy of up to 44% of the cost of employing consultants to conduct environmental audits. The Environmental Protection Act of 1993 supplements voluntary measures and support schemes by requiring firms to acquire permits for planned activities ensuring that the environmental impact is as low as reasonably achievable (the Alara principle). A permit application must include an assessment of the environmental impact of the activity to be undertaken and planned energy conservation measures. A firm covered by an LTA, and meeting its obligations, is assumed to be already fulfilling the Alara principle. A non-participating firm, however, or one which is not performing well under its LTA, is subject to stricter requirements. The environmental permit system can be seen as the 'stick' to the 'carrots' of voluntary measures and incentives. A recent evaluation of LTAs covering 70% of energy consumption showed an efficiency improvement of 9% from 1989 to 1994. In the residential and commercial sectors, measures to improve energy efficiency include financial incentives, efficiency standards and voluntary agreements. The utilities are increasingly taking over subsidy schemes for energy conservation in buildings from the government, and currently provide about half of subsidies and advisory services. Insulation standards for new buildings were tightened in 1992, while energy efficiency standards for new homes and non-residential buildings were implemented in 1995. The Energy Savings Appliances Act sets out regulations on appliance labelling and energy efficiency standards in the framework of EU policy, examples being certification of hot water boilers and labelling of refrigerators and freezers. The labelling requirement will be extended to other appliances. LTAs on energy conservation have been agreed with the health sector, KLM and Schiphol airport and are planned in a number of other commercial and institutional sectors. These will cover about 30% of energy use in the commercial and institutional sector with an overall efficiency improvement target of 25-30%. An LTA has been agreed with the subsidised housing sector to improve the energy efficiency of rented accommodation.
New Zealand - Until recently, improving energy efficiency was not a strong priority for New Zealand, thanks to its abundant indigenous supplies of cheap energy through hydropower. The high energy intensity of New Zealand's economy, however, leaves considerable room for improvement, and increasing efficiency has now become a key element in New Zealand energy policy, motivated by both climate change considerations and concern over how to meet projected increases in energy demand. In 1992, the government set up the Energy Efficiency and Conservation Authority (EECA) as an independent agency charged with promoting energy efficiency in all sectors. In 1994, the government considerably expanded its 1993 Energy Efficiency Strategy (EES) into a 10-point plan to be implemented over 3 years, allocating NZ$8.45m (US$5.6m) in new funds, which in effect doubled the Authority's funding. The EES is directed at facilitating the uptake of cost effective energy efficient instruments and informing and motivating energy users on energy efficiency. The 10-point strategy consists of broad policy goals, rather than specific measures with targets and timetables, but many of the elements have since been elaborated and implemented by the EECA.
Norway - Norway's relatively low electricity prices present a significant barrier to improving the efficient use of electricity. A White Paper on energy efficiency was submitted to the Parliament in 1993, recommending the establishment of regional energy efficiency information/education centres in each of the Norway's 19 counties. Ten centres had been set up by the end of 1995, funded by a surcharge on electricity prices and by public funds. However, in 1994-95 government grants and direct investments for energy efficiency were scaled back substantially from previous levels. The government is encouraging companies to enter into voluntary agreements and to network with one another to analyse and improve energy efficiency in manufacturing. The government also plans to establish 12-20 regional centres to promote energy efficiency among local building owners and households, working in cooperation with local utilities, oil companies and energy equipment suppliers. The purpose of the centres is to ensure more consistent provision of energy services to the public.
Portugal - The general position of the government is that economic growth should take priority over environmental considerations and energy conservation. Though building insulation regulations were adopted in 1991, they are not strict because the emphasis is on making buildings more comfortable rather than on conserving energy. The government does, however, have several energy efficiency support programmes in place, which are partly financed by the EU. The Strategic Programme (PEPID II), provides grants and low interest loans for energy studies, audits and demonstration projects. In addition, the SIURE programme provides industrial firms with assistance for energy projects of all types, including audits, environmental and feasibility studies, development of renewable sources of supply, diversification of primary energy sources, and energy efficiency. As of June 1995, companies representing 51% of total industrial energy consumption were participating.
Spain - The Parliament adopted the National Energy Plan (PEN 91) in 1992, introducing for the first time environmental protection as a national objective. The Plan for Saving and Efficiency in Energy (PAEE) is the main implementation tool, including measures aimed at reducing heat loss in buildings, making use of more efficient equipment; substituting gas-fired CHP for coal use and auto-generated CHP for utility-served electricity. PITMA (industrial and technological programme for the environment), established by the Ministry of Industry in 1989, supports investments in fuel switching and environmentally friendly technologies. Between 1990 and 1993, more than 2,500 firms participated in over 5,000 projects. A second PITMA is planned, which will emphasise voluntary programmes. There is considerable room for efficiency improvements in buildings and homes, which are relatively inefficient in spite of the fact that Spaniards pay electricity prices which are among the highest in Europe. Spain has weak building efficiency standards and is only now considering bringing such standards into line with CEC guidelines. The government intends to support the substitution of natural gas for fuel oil in buildings to the extent that expansion of the gas grid makes this possible. The government is currently preparing a new decree on energy efficiency which will incorporate EU guidelines. It will address energy certification of buildings; thermal insulation standards for new buildings; periodic boiler inspections; energy audits for firms with large energy consumption; and funding support for efficiency improvements.
Sweden has a high proportion of heavy, energy intensive industries, including pulp and paper, aluminium, wood products, iron and steel, chemicals, and automobiles. Swedish buildings are among the most energy efficient in the world. Most Swedish homes already have high heating efficiencies, so there is little to be accomplished from having utilities further encourage homeowners to retrofit. Sweden's housing stock is relatively new, with the majority of homes being constructed since 1964 as a result of the government's 'one million' house building programme. Many of these homes were built to standards more exacting than those imposed in Sweden's already strict building codes, as the builders believed (rightly) that the government would make the codes even stricter in the future. Standards are now being relaxed both to save costs and to provide more ventilation, since it has been learned that excessive insulation and 'tightness' increase health problems from mildew, allergenics and radon. Sweden also has relatively high appliance and equipment efficiency standards. A 1991 Act strengthened the efficiency support programme of Nutek (the National Board for Industrial and Technical Development), which was given a five year budget of SKr400 million (Ecu48 million). It supports demonstrations of energy efficient technologies in housing, commercial premises, and industrial facilities. It encourages manufacturers to improve the efficiencies of energy-using appliances and equipment. Although environmental policy is mainly driven by the national government, local governments also take initiatives, raising revenue for environmental programmes from energy sales and local taxes. They set efficiency standards for government departments as well as for private housing. Triple-glazed windows and 50cm of insulation in homes are the norm. In the private sector many companies have responded to Sweden's relatively tough environmental regulations and high fuel tax rates (and the anticipation of further increases in the future) by introducing efficiency measures and cleaner technologies before they are required or can be justified on strictly economic grounds. There are no established 'voluntary programmes' for reducing GHG emissions, such as those found in the US, UK and Canada.
Switzerland - In 1991 the government issued a federal decree on efficient energy use (DEU), which has provided the basis for financial support programmes and regulations, including the following: (1) individual metering of heating and hot water use in new and existing buildings; (2) energy efficiency target values for equipment, household appliances and vehicles; (3) a licensing obligation for new electric heating; and (4) government support for R&D programmes in renewable technologies and waste heat. The decree expires in 1998, and the federal government has proposed an energy law to replace the DEU permanently. In some areas the law would go beyond the provisions of the DEU, enabling the federal government to reduce the consumption of appliances, vehicles and plants through the use of economic instruments such as emissions certificates and feebates. It would stipulate for utilities integrated resource planning, the use of waste heat, state-of-the-art efficiencies for power generation from fossil fuels and efficiency standards for heating systems in new buildings. Debate to date over the proposed energy law has revealed widespread approval of efficiency regulations. The government's energy plan (Energy 2000) and the DEU take a consensus-based approach, relying on the involvement of representatives of all levels of government as well as from utilities, industry, consumer groups and environmental organisations. Citizen 'action groups' promote voluntary agreements within sectors, such as industry, services, residential buildings, etc. Energy 2000 is reviewed annually by 'independent' government agencies. Voluntary efficiency measures are demonstrating success in Switzerland. An example is the Energy Model Zurich programme undertaken by a group of 15 companies, which collaborate on efficiency measures. The objective of the group is to bring about a 19% saving in electricity compared with business-as-usual projections. The group was reported in 1995 to have achieved savings greater than the target. Swiss industry pays among the highest electricity prices in Europe. It is also subject to the Continent's most stringent air pollution laws. The Ordinance on Energy Use has established energy consumption targets for all major household appliances as well as entertainment electronics, such as television sets, video recorders and personal computers. Targets are voluntary, but the branches concerned understand that if the they are not met the government may set legally binding standards. Targets have also been established for certain types of office equipment including fax machines, printers and copiers. Regulations governing energy use in buildings, including standards for space heating and electricity consumption and the requirement to meter and bill individual units for space and water heating are being administered by the cantons, 24 of which (out of 26 total) have adopted measures for achieving Energy 2000 programme objectives.
UK - Buildings are responsible for half the energy use in the UK, yet the government has in the past been relatively inactive in promoting conservation and efficiency. Residences account for nearly 30% of final energy consumption, with the major uses being space heating, water heating and refrigeration. Energy efficiency standards for new buildings were significantly strengthened in 1993 but remain well below the levels common in some other northern European countries, and the stock overall includes many poorly insulated buildings. Appliances and lighting account for only 10% of domestic energy consumption but 25% of domestic CO2 emissions. The technical scope for improving energy efficiency in the residential sector is large; the difficulty is overcoming inertia and weak motivation, and the lack of consumer information. Efficiency programmes in the commercial sector are largely based on voluntary efforts and government 'encouragement, advice, and information' and include: (1) the Making a Corporate Commitment Campaign, in which organisations are asked to give a board level director responsibility for an energy efficiency strategy; (2) the Energy Management Assistance Scheme and Best Practice Programme, which encourage, through information dissemination and education, the application of modern efficiency methods and monitoring procedures; (3) the Energy Design Advice Scheme, which encourages the use of the latest proven energy saving techniques in building projects. The Energy Saving Trust is designed to implement various efficiency promoting schemes, including the promotion of high efficiency boilers and CHP systems in residential properties, the promotion of better insulation and heating controls in dwellings, and the establishment of energy advice centres. In March 1993, a VAT rate of 17.5% on domestic energy was announced. Other measures include informational and advisory services to various energy users, both business and residential, and new building regulations and appliance standards to encourage energy efficiency. The government set itself energy saving targets of 15% for the period 1990-95 and 20% for the period 1990-2000. Results to date from EST and voluntary programmes are disappointing mainly because expected EST funding from levies on gas and electricity customers have been largely blocked by regulators who have found such levies contrary to their mandate. As a result, in the future the EST will base new schemes on 'initial pump priming' rather than on 'substantial grants'. At the end of 1995 the government cut EST funding by a third. Also working against energy savings is the fact that gas and electricity bills have been falling as a result of deregulation and increased competition. Value added tax on fuel has had limited direct impact on energy efficiency investments because of expectations that gas and electricity prices will continue to decrease. Perhaps the most important measure in the UK affecting the domestic sector has been the enactment, in April 1996, of a private member's Home Energy Conservation Bill, which requires all local authorities to develop a database and annual assessment of the state of their housing stock and of opportunities for cost-effective improvements in energy efficiency. The first reports are due in 1997.
US - During the 1970s almost all states and local governments established energy efficiency standards for new residential buildings and have since strengthened them, though some have not been substantially changed in the last ten years. A number of states and some federal agencies have adopted the model energy code of the Council of American Building officials, and various versions have been embraced in whole or in part in state and local building codes. In 1988 efficiency standards for most major types of residential energy-using equipment were established, and these are being updated and strengthened. New standards are in place covering clothes washers and dryers, dishwashers and refrigerators. A moratorium on issuing further rules was imposed by Congress in 1996, but once the moratorium is lifted the Department of Energy (DOE) plans to proceed with rule-making. Through voluntary 'partnerships', DOE assists communities to carry out building retrofits/renovations to capture energy efficiency opportunities. Under 'Golden Carrot' programmes, it establishes partnerships with non-profit organisations, utilities, and environmental groups to accelerate commercialisation of advanced energy-efficient appliances by creating financial incentives from private and public sources. The first 'Golden Carrot' programme - the Super Efficient Refrigerator programme - pooled $30 million in utility rebates to offer to the manufacturer able to commercialise a 50% more efficient, CFC-free refrigerator. Similar programmes address industrial equipment such as fans, compressors, pumps, and electric motors. Also under voluntary partnerships, the Environmental Protection Agency (EPA) assists businesses to reduce and/or recycle waste. It is also establishing programmes to encourage energy efficiency in buildings. The first such programme, 'Green Lights', involves commitments by over 1,500 major companies and public institutions to adopt energy efficient lighting. The Energy Star Buildings and Rebuild America programmes are designed to improve the efficiency of heating, cooling, and air handling in commercial buildings. The government is launching a new national effort to market Home Energy-Rating Systems (HERS) and Energy-Efficient Mortgages (EEMs). HERS provide home buyers with information on the energy efficiency of new and existing homes, which serve as the yardstick by which EEMs are created. EEMs allow home buyers to finance investments in energy improvements as part of their mortgage in situations where the monthly energy savings are greater than the increased monthly payments.