Principles of successful non-residential energy efficiency policy

Peter Mallaburn

Abstract

Most organisations do not invest in energy efficiency even when it makes sense to do so. This is the “energy efficiency gap” that policymakers have struggled with for over 40 years. Current policy is based on overcoming the range of technical, economic and organisational barriers to energy efficiency that exist. However, governments are finding that energy efficiency policies are still not delivering their full potential.

Researchers now consider that policy should focus not simply on finding and overcoming barriers, but on how energy efficiency fits with the organisation’s wider investment decision-making processes. The evidence is that energy efficiency happens when it is strategically important, or “salient”, and that salience is strongly influenced by external drivers such as reputation and risk and also by the way different part of the organisation are connected and resourced.

These salience drivers are complex, but vary in a predictable way between organisations and sectors. This patterning could be used to open up new intervention points and approaches for policy to influence investment behaviours in businesses and the public sector. The experience of successful energy efficiency policies overseas supports this conclusion with case studies presented from Australia and Germany.

The overall message for policymakers is that effective policy depends not just on which policies are used, but how they are used together:

• Connecting policies together, for example by both exploiting reputational drivers and providing incentives to enable the organisation to respond.
• Deploying policies in the right order, for example by engaging with trade bodies to build confidence and capacity before regulating.
• Devolving policy towards regional and local agents and support networks that have better access to and understanding of the organisation’s needs.

Banner photo credit: Alireza Attari on Unsplash