Policy analysis for energy efficiency in the built environment in Spain

Energy efficiency is considered one of the most cost effective ways to enhance security of energy supply and reduce greenhouse gas emissions. According to Europe's Energy Efficiency Plan, the biggest energy savings potential in the EU lies in the built environment. However, the many barriers to energy efficiency have prevented the implementation of the existing potential so far. This paper evaluates the existing policy instruments aimed at energy efficiency in buildings in Spain as laid down in the 2nd National Energy Efficiency Action Plan (NEEAP). The results show that the current policy package is insufficient to yield the existing energy savings potential in this sector. As much of the savings potential can be found in existing buildings and realization of this potential very much relies on voluntary action, the renovation sector is in need of an appropriate financial framework that mobilizes sufficient public and private financial resources, and transparent and efficient mechanisms to ensure the return on investment and payments from those who benefit from the renovation. Such financial framework needs to be supported by a regulatory framework that is tuned to existing buildings and an organizational framework that effectively connects the different policy layers in Spain.     

Climate policies for road transport revisited (I): Evaluation of the current framework

The global rise of greenhouse gas (GHG) emissions and its potentially devastating consequences require a comprehensive regulatory framework for reducing emissions, including those from the transport sector. Alternative fuels and technologies have been promoted as a means for reducing the carbon intensity of the transport sector. However, the overall transport policy framework in major world economies is geared towards the use of conventional fossil fuels. This paper evaluates the effectiveness and efficiency of current climate policies for road transport that (1) target fuel producers and/or car manufacturers, and (2) influence use of alternative fuels and technologies. With diversifying fuel supply chains, carbon intensity of fuels and energy efficiency of vehicles cannot be regulated by a single instrument. We demonstrate that vehicles are best regulated across all fuels in terms of energy per distance. We conclude that price-based policies and a cap on total emissions are essential for alleviating rebound effects and perverse incentives of fuel efficiency standards and low carbon fuel standards. In tandem with existing policy tools, cap and price signal policies incentivize all emissions reduction options. Design and effects of cap and trade in the transport sector are investigated in the companion article (Flachsland et al., in this issue).     

The impact of niche green developments in transforming the building sector: The case study of Lochiel Park

Energy use in residential buildings is a significant contributor to global carbon emissions. The South Australian Government responded to concern for anthropogenic greenhouse gas emissions by creating a model development of near zero energy homes in a near zero carbon impact estate. The creation of the Lochiel Park Green Village challenged a collective of industry experts and policy makers to set objectives, performance targets and regulatory guidelines outside existing institutional and professional norms. Literature suggests that the creation of niche events can help the transition away from dominant technologies, practices and beliefs, and lead to organisations embracing new tools, construction practices, technologies, standards and policies. By applying a multi-level socio-technical framework, and utilising evidence collected from a series of interviews with key government and industry leaders, this paper examines how, under the influence of landscape pressures, structural change at the regime level can come from the incubation of ideas and experiences at the niche level. The available evidence finds that the creation of the Lochiel Park Green Village has allowed many individuals and organisations to gain a more detailed and practical understanding of sustainable housing, and has given organisations the confidence to change industry practices, government policies, and regulatory standards.     

Towards improved policy processes for promoting innovation in renewable electricity technologies in the UK

This paper analyses recent, current and potential future relations between policy processes and substantive outcomes in UK low carbon innovation policy, focussing on policies relating to renewable electricity generation technologies. It examines the development of policy processes relating to the adoption and implementation of the Renewables Obligation and how these may affect the current and likely future success of the Obligation in promoting low carbon innovation. It examines the new policy and institutional processes put in place in the 2003 Energy White Paper and argues that these are unlikely to provide the strategic long-term framework needed to realise the ambitious goals for UK energy policy set out in the White Paper. Finally, it outlines some suggestions for further development of policy processes to facilitate improved delivery of these goals, based on guiding principles for sustainable innovation policy processes, developed by the authors and their colleagues.     

Evaluating potential policies for the UK perennial energy crop market to achieve carbon abatement and deliver a source of low carbon electricity

The electricity infrastructure in many developed countries requires significant investment to meet ambitious carbon emissions reduction targets, and to bridge the gap between future supply and demand. Perennial energy crops have the potential to deliver electricity generation capacity while reducing carbon emissions, leading to polices supporting the adoption of these crops. In the UK, for example, support has been in place over the past decade, although uptake and the market development have so far been relatively modest. This paper combines biophysical and socio-economic process representations within an agent-based model (ABM), to offer insights into the dynamics of the development of the perennial energy crop market. Against a changing policy landscape, several potential policy scenarios are developed to evaluate the cost-effectiveness of the market in providing a source of low carbon renewable electricity, and to achieve carbon emissions abatement. The results demonstrate the key role of both energy and agricultural policies in stimulating the rate and level of uptake; consequently influencing the cost-effectiveness of these measures. The UK example shows that energy crops have the potential to deliver significant emissions abatement (up to 24 Mt carbon dioxide equivalent year⁻¹, 4% of 2013 UK total emissions), and renewable electricity (up to 29 TWh year⁻¹, 8% of UK electricity or 3% of primary energy demand), but a holistic assessment of related policies is needed to ensure that support is cost-effective. However, recent policy developments suggest that domestically grown perennial energy crops will only play a niche role (<0.2%) of the UK energy balance.     

Australian renewable energy policy: Barriers and challenges

Effective policy and regulatory frameworks are paramount to incentivising the deployment of renewable energy to achieve long term reductions in carbon emissions. Australia's renewable energy policy has taken significant steps towards encouraging the deployment of lower-emission energy generation. Significant policy barriers still exist at the federal and state levels, however, which have reduced the effectiveness of a concerted national effort to deploy renewables. The current policy landscape has favoured mature technologies which present the lowest investment risk at the expense of emerging options which may present greater efficiency and emissions reduction gains. The lack of support for emerging technologies delays their effective deployment and the accumulation of highly skilled human capital, until the medium to long term. This paper outlines the key policy frameworks, incentives and regulatory environment which encompasses the renewable energy sector, and presents a critical analysis of the barriers faced by the industry.     

Index decomposition analysis for comparing emission scenarios: Applications and challenges

As global action on climate change gathers momentum, an area of interest is what the world's greenhouse gas emission trajectory will be in the future and whether it can meet the emission targets set forth. To address these questions, emission scenarios which range from business-as-usual to deep decarbonization scenarios have been developed by researchers using different assessment models. An understanding of the sources of variations across the range of these emission trajectories is of interest for discussions, debates and policy planning. However, since these models often have different structures and input variables, comparisons of the results are not straightforward. In this regard, index decomposition analysis (IDA) has emerged as a tool to facilitate comparisons in a harmonized way. It allows differences in emissions over time or between models to be broken down based on a set of accepted driving factors. This paper reviews the literature and summarizes the features and challenges. A multi-level scenario decomposition framework is proposed to address the challenges which include how to quantify differences arising from the energy transformation sector, the adoption of renewable energy, carbon capture and storage, and bio-energy carbon capture and storage technologies. A case study and guidelines for implementing the framework are presented.     

Comparing climate policies to reduce carbon emissions in China

Currently, China is the largest carbon emitter mainly due to growing consumption of fossil fuels. In 2009, the Chinese government committed itself to reducing domestic carbon emissions per unit of GDP by 40–45% by 2020 compared to 2005 levels. Therefore, it is a top priority for the Chinese government to adopt efficient policy instruments to reduce its carbon intensity. Against this background, this paper develops a general equilibrium model and seeks to provide empirical contributions by comparing the potential impacts of several different policy options to reduce China's carbon emissions. The main findings are as follows. Firstly, these climate policies would affect the structure of economy and contribute to carbon emissions reduction and carbon intensity reduction. Secondly, there would be significant differences in the economic and environmental effects among different climate policies and hence, the government would trade-off among different economic objectives to overcome any potential resistances. Thirdly, there would be considerable differences in the emissions effects of absolute and intensity-based carbon emissions controls, implying that the government might adopt different climate policies for absolute or intensity-based carbon emissions controls. Looking ahead, the government should trade-off among different objectives when designing climate reforms.     

Strategic use of storage: The impact of carbon policy,resource availability,and technology efficiency on a renewable-thermal power system

Concerns about climate change have spurred governments to reduce carbon emissions by supporting adoption of renewable energy (RE) technologies. Due to the intermittent and location-specific nature of RE technologies, energy storage has become important because it could be used to smooth out temporal disparities in residual demand. Thus, carbon policy has made storage-enabled RE generation more critical to the power sector, and this enhanced position could be exploited by firms to exert market power. Using an equilibrium model, we examine the implications of policy interventions and technological change on the marginal value of energy storage in a power market with RE and thermal generation. In particular, we specify the market conditions under which RE producers with storage strategically shift deployment of their resource to the off-peak period and outline its implications for the marginal value of RE storage. Moreover, we find that even price-taking RE producers may actually increase off-peak RE production as storage efficiency increases. Consequently, the RE producer's profit decreases with storage efficiency, which conflicts with the social objective of improving storage efficiency. These private and social incentives can be better aligned via a carbon tax, however. Hence, our results may inform the regulatory process governing market design of a power sector with increasing capacities of RE generation and storage.     

CO2 emissions and mitigation potential in China’s ammonia industry

Significant pressure from increasing CO₂ emissions and energy consumption in China’s industrialization process has highlighted a need to understand and mitigate the sources of these emissions. Ammonia production, as one of the most important fundamental industries in China, represents those heavy industries that contribute largely to this sharp increasing trend. In the country with the largest population in the world, ammonia output has undergone fast growth spurred by increasing demand for fertilizer of food production since 1950s. However, various types of technologies implemented in the industry make ammonia plants in China operate with huge differences in both energy consumption and CO₂ emissions. With consideration of these unique features, this paper attempts to estimate the amount of CO₂ emission from China’s ammonia production, and analyze the potential for carbon mitigation in the industry. Based on the estimation, related policy implications and measures required to realize the potential for mitigation are also discussed.     

Enabling technologies for industrial energy demand management

This state-of-science review sets out to provide an indicative assessment of enabling technologies for reducing UK industrial energy demand and carbon emissions to 2050. In the short term, i.e. the period that will rely on current or existing technologies, the road map and priorities are clear. A variety of available technologies will lead to energy demand reduction in industrial processes, boiler operation, compressed air usage, electric motor efficiency, heating and lighting, and ancillary uses such as transport. The prospects for the commercial exploitation of innovative technologies by the middle of the 21st century are more speculative. Emphasis is therefore placed on the range of technology assessment methods that are likely to provide policy makers with a guide to progress in the development of high-temperature processes, improved materials, process integration and intensification, and improved industrial process control and monitoring. Key among the appraisal methods applicable to the energy sector is thermodynamic analysis, making use of energy, exergy and ‘exergoeconomic’ techniques. Technical and economic barriers will limit the improvement potential to perhaps a 30% cut in industrial energy use, which would make a significant contribution to reducing energy demand and carbon emissions in UK industry. Non-technological drivers for, and barriers to, the take-up of innovative, low-carbon energy technologies for industry are also outlined.     

Bounding the climate viability of natural gas as a bridge fuel to displace coal

Natural gas has significant potential carbon benefits over coal when used for electricity generation, but these benefits can be offset by emissions of fugitive methane or delays in the adoption of near-zero carbon technologies. We analyze the time-evolution of radiative forcing from both natural gas and coal-based electricity generation by calculating average radiative forcing over an interval of time from greenhouse gas emissions under a range of assumptions for fugitive methane leakage, electricity generation efficiency, and delays in the adoption of near-zero carbon technologies. We find that leakage rates of between 5.2% and 9.9% are required for natural gas to result in greater mean forcing than coal over the next 100 years. We show that natural gas infrastructure with modest leakage could remain in place for 1.5–2.4 times the time interval that coal generation would have persisted prior to replacement with near-zero carbon technologies before the climate benefits of replacing coal with natural gas are negated. Natural gas can serve a viable bridge away from coal-based generation if avoiding longer-term climate impacts is prioritized, fugitive methane emissions are minimized, and the large-scale transition to near-zero carbon alternatives is unlikely to happen in the near-term.     

Energy policy in transport and transport policy

Explanations for, and indirect evidence of, imperfections in the market for private passenger vehicle fuel economy suggest there is a reasonable case for combining fuel economy standards and fuel or carbon taxes to contribute to an energy policy that aims to reduce greenhouse gas emissions and improve energy security. Estimates of key elasticities, including the rebound effect, indicate that the positive and negative side-effects of fuel economy measures on transport activities and external costs are limited. However, an energy policy for transport does not replace a transport policy that aims to manage the main transport externalities including congestion and local pollution. Conventional marginal cost estimates and standard cost-benefit reasoning suggest that policies that address congestion and local pollution likely bring benefits at least as large as those from fuel economy measures. But the large uncertainty on the possible effects of greenhouse gas emissions constitutes a strong challenge for standard cost-benefit reasoning. Emerging results from methods to cope with this uncertainty suggest that policies to stimulate the widespread adoption of low-carbon technologies in transport are justified.     

Imperfect market,emissions trading scheme,and technology adoption: A case study of an energy-intensive sector

It is widely accepted that the firms included in an emissions trading scheme (ETS) come mostly from oligopolistic industries. The “exclusionary manipulation” of these heterogeneous emitters can distort both output and permit markets and lead to differences in abatement technology adoption. We studied the impacts of asymmetric firms' market power on the diffusion of abatement technologies. A model for technology adoption among heterogeneous firms has been established, which takes into account diversity in production capacity and the integration of firms' strategic behaviour in both the carbon permit and the output markets. Our model reveals that, considering the direct and strategic effects in adoption benefits, firms' production capacity can directly determine their sequence order of adoption, and their market power can accelerate the diffusion of a new abatement technology. A case study of an energy-intensive sector in China is illustrated to support the conclusions derived from the model and help policymakers better understand the diffusion of abatement technologies under imperfect market structure.     

The efficient use of energy: Tracing the global flow of energy from fuel to service

The efficient use of energy is a key component of current efforts to reduce carbon emissions. There are two factors which are important when assessing the potential gains from energy efficiency technologies: the scale of energy flow and the technical potential for improvement. However, most efficiency analyses consider only the potential gains from known efficiency technologies, while ignoring the complex flow of energy through the chains of conversion devices. In response, this paper traces the global flow of energy, from fuels through to the final services, and focuses on the technical conversion devices and passive systems in each energy chain. By mapping the scale and complexity of global energy flow, the technical areas which are likely to deliver the largest efficiency gains can be identified. The result is a more consistent basis for directing future research and policy decisions in the area of energy efficiency.     

How to support growth with less energy

Economic growth with less use of primary energy and lower carbon emissions can be achieved through existing and new technical solutions and by behavioural change. These solutions secure growth with lower carbon emissions and reduce our dependence on oil and gas, thereby improving security of energy supply. The implication of the Energy White Paper goal of reducing CO₂ emissions by 60% by 2050 is a six-fold reduction in the carbon intensity of the UK economy, and further reductions will be needed. Efficient and renewable supply, distribution and end-use technologies have multiplicative effects, but constraining demand growth is crucial to the rate and extent of reducing emissions. Goals include reductions in the energy intensity of transport and buildings and in the energy intensity of major building materials with the development of technologies and demand management. There will also need to be infrastructural developments that encourage low-carbon technologies and increase energy diversity and security of supply, better low-carbon planning and improved co-ordination of planning, building control and other policy tools, better monitoring and feedback on the real performance of energy-efficient technologies, and improved capabilities to model whole energy systems, including demand and supply as well as social and economic issues.     

Energy efficiency barriers in commercial and industrial firms in Ukraine: An empirical analysis

Improvement in energy efficiency is one of the main options to reduce energy demand and greenhouse gas emissions. However, large-scale deployment of energy-efficient technologies is constrained by several factors. Employing a survey of 509 industrial and commercial firms throughout Ukraine and a generalized ordered logit model, we quantified the economic, behavioral, and institutional barriers that may impede the deployment of energy-efficient technologies. Our analysis shows that behavioral barriers resulted from lack of information, knowledge, and awareness are major impediments to the adoption of energy-efficient technologies in Ukraine, and that financial barriers may further impede investments in these technologies especially for small firms. This suggests that carefully targeted information provisions and energy audits will enhance Ukrainian firms' investments in energy-efficient technologies to save energy consumption, improve productivity, and reduce carbon emissions from the productive sectors.     

Renewable energy sources in Turkey for climate change mitigation and energy sustainability

In Turkey, there is a much more potential for renewables, but represent about 37% of total energy production and 10% of total energy consumption. This share is not enough for the country and the governments should be increase to this situation. Renewable energy technologies of wind, biomass, hydropower, geothermal, solar thermal and photovoltaics are finally showing maturity and the ultimate promise of cost competitiveness. With respect to global environmental issues, Turkey's carbon dioxide emissions have grown along with its energy consumption. States have played a leading role in protecting the environment by reducing emissions of greenhouse gases. In this regard, renewable energy resources appear to be the one of the most efficient and effective solutions for clean and sustainable energy development in Turkey. Turkey's geographical location has several advantages for extensive use of most of these renewable energy sources. Certain policy interventions could have a dramatic impact on shaping the relationship between geological, geographic and climatic conditions and energy production. This study shows that there is enough renewable energy potential in Turkey for fuels and electricity. Especially hydropower and biomass are very well.     

Environmental Kuznets Curve for carbon emissions in Pakistan: An empirical investigation

This study investigates the relationship between carbon emissions, income, energy consumption, and foreign trade in Pakistan for the period 1972–2008. By employing the Johansen method of cointegration, the study finds that there is a quadratic long-run relationship between carbon emissions and income, confirming the existence of Environmental Kuznets Curve for Pakistan. Moreover, both energy consumption and foreign trade are found to have positive effects on emissions. The short-run results have, however, denied the existence of the Environmental Kuznets Curve. The short-run results are unique to the existing literature in the sense that none of the long-run determinants of emissions is significant. The contradictory results of short- and long-run give policy makers the opportunity to formulate different types of growth policies for the two terms taking environmental issues into consideration. In addition, the uni-directional causality from growth to energy consumption suggests that the policy makers should not only focus on forecasting future demand for energy with different growth scenarios but also on obtaining the least cost energy. Furthermore, the absence of causality from emissions to growth suggests that Pakistan can curb its carbon emissions without disturbing its economic growth.     

Rewarding energy savings rather than energy efficiency: Exploring the concept of a feed-in tariff for energy savings

Financial incentives are important for overcoming certain market barriers to improved energy efficiency and for the adoption of energy efficient technologies. Financial incentives are mainly focused on the introduction of specific technologies, rather than behavioural change. While the declared goal of financial support schemes very often is to save energy or reduce harmful emissions rather than to foster new technologies per se, it is often encountered that such financial support for energy efficient technologies may not ensure real energy savings due to the rebound effect and various market barriers.In the area of renewable energies it is common for financial support to be given to power producers for the verified production of renewable electricity, in the form of a guaranteed financial incentive (feed-in tariff). In the energy efficiency policy research little attention has been paid to the possible use of a “feed-in tariff” in the form of a financial incentive based on the kWh saved by the end-user. This paper discusses the possible setup of a feed-in tariff designed to reward energy savings.