regulations are coupled with voluntary labels and tax credits for both manufacturers and consumers. This combination eliminates the least efficient products while compensating manufacturers for some of the increased production costs through tax credits and premiums charged for Energy Star designs.
Barriers that are particularly prominent in developing countries are “subsidised, not cost-reflective energy prices, lack of awareness on the importance and the potential of energy efficiency improvements, lack of financing, lack of qualified personnel and insufficient energy service levels” (UNEP SBCI 2007b). Several developing countries have enacted legislation on energy efficiency in buildings. Special enabling factors to support measures for green buildings in developing countries are the need for:
■ Getting the energy price right, so that more efficiency investments become profitable;
■ Technical assistance and training;
■ Demonstration projects and information to build trust; ■ Financial assistance or funding mechanisms;
■ Regulatory measures, such as mandatory audits, combined with incentives such as subsidies or awards; ■ Monitoring and evaluation (requiring baseline data);
■ Institutionalisation (e.g. establishing energy agencies independent of utilities); and
■ Adaptation to local circumstances, including climate and culture.
Clearly, adjusting the priorities of enabling instruments to their context
is critical. In developing countries
the first step might introduce non-mandatory standards that act as educational platforms. The next move could include mandatory standards, which exclude less efficient products from the market. Subsidies or rebates that provide an incentive to replace old equipment with new, more efficient products are yet a further possible step. At the same time, public leadership and energy-performance contracting can play a key role in public housing projects. In developed countries mandatory standards and regulatory actions are the way to start, followed by rebates for retrofitting and green mortgages.
An integrated policy framework that combines
regulatory instruments, such as standards or mandatory audits in certain buildings, capacity-building, training and information campaigns as well as demonstration projects coupled with (fiscal or other) incentives is most likely to effectively reduce GHG emissions in developing countries. The following policy instruments, for example, can be effectively combined (UNEP SBCI 2007b):
■ Standards, labelling and financial incentives;
■ Regulatory instruments and information programmes; and
■ Public leadership programmes and energy performance contracting (EPC) in the public sector.
In assessing the impact of instruments in developing countries, it is important to note that initiatives to address restricted energy services aim not to reduce energy consumption, but rather to ensure more energy services can be accessed and afforded with the available resources.