World Energy Outlook 2006

Hurdles to Policy Adoption and Implementation
The economic, energy-security and environmental benefits of the policies of
the Alternative Policy Scenario are elaborated in the previous chapters. Why,
then, have these policies not already been adopted and what might continue to
prevent them from being rapidly adopted and implemented? The barriers are
various.
Improving Energy Efficiency
Improving energy efficiency is often the cheapest, fastest and most
environment-friendly way to bring energy needs and supplies into balance.
Raising energy efficiency also reduces the need to invest in energy-supply
infrastructure. Many energy-efficiency measures are economic: they will pay for
themselves over the lifetime of the equipment through reduced energy costs
(see Chapter 8). Widespread dissemination of best practice and technologies
also helps reduce local and regional air pollutants, as well as greenhouse-gas
emissions.
Several different policies have been proposed to increase efficiency. Two of the
most effective seek to reduce energy demand in the transport sector: an increase
in average fuel efficiency in the US light-duty vehicle fleet, and a vehicle
efficiency programme in Europe. Both face considerable obstacles. In the case
of the United States, some car manufacturers judge that, on the basis of present
incentives and penalties, a switch from large vehicles to smaller and more
efficient alternatives will mean smaller margins. The public, while supporting
in principle the idea of increased efficiency – especially in the current price
context – and lower pollution, allows these considerations to be outweighed by
arguments that smaller cars are inherently less safe, are less comfortable and
offer inferior performance. The new measures assumed in the Alternative
Policy Scenario would impose a new fuel-economy standard but not the
technology to achieve it, thereby giving car manufacturers some flexibility,
while capitalising on public support for improved efficiency.
In the European Union, fuel-efficiency agreements were initially developed
with the car manufacturers on a voluntary basis. The manufacturers are not on
track to meet the target of 120g CO 2 /km in 2012. The European
Commission is therefore considering mandatory standards, coupled with
differentiated excise-tax rates according to fuel efficiency.
The Japanese “Top Runner” approach for light-duty vehicles identifies the
most fuel-efficient models in each vehicle class and requires future models to
meet a level of fuel consumption close to the current (or expected future) best.
Top Runner improves average fuel efficiency by encouraging improvements in
the worst vehicles (or their elimination), and encouraging continuous
improvements in the best.
Chapter 10 - Getting to and Going Beyond the Alternative Policy Scenario 253
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© OECD/IEA, 2007