Designing Policies and Programs to Accelerate High Efficiency Appliance Adoption
Appliance efficiency standards, labeling, and incentive programs have been implemented globally to accelerate the market transformation of high efficiency products since the 1970s, raising the market share of efficient products and average efficiency of common household appliances in many countries. Yet recent analyses suggest that there is still significant potential for different markets to move towards higher efficiency products. To address challenges facing traditional efficiency policies and programs, large economies including China, Japan, Korea, the EU, and the U.S. have adopted effective regulatory, fiscal, and voluntary multilateral policies and programs to accelerate market transformation towards higher efficiency products. A review of nine international best practice case studies show that development and increased market adoption of top-of-the market efficiency and Best Available Technologies (BATs) can be accelerated through design changes in traditional standards and labeling programs, innovative incentive policies, and multilateral award programs. The key findings include:
Traditional standards and labeling programs can be advanced through target-setting, where future efficiency requirements are set based on pre-commercial ambitious efficiency levels of technologies not yet widely available on the market. By anticipating the near-term market penetration of pre-commercial, top-of-the market efficiency technologies and explicitly recognizing their role on the market ambitious future mandatory efficiency requirements, target-setting sends a clear signal to manufacturers to invest in super-efficient technology development. Global best practice case studies that have successfully demonstrated the target-setting approach include both EU’s recently revised Ecodesign requirements for electric motors and Japan’s Top Runner program, and the re-scaled EU Energy Label with top 2 efficiency grades reserved for BATs not yet on the market.
Incorporating innovative design elements in incentive programs for stimulating new appliance purchases can help meet specific programmatic goals and achieve additional socio-economic and environmental benefits. These benefits include economic stimulus and job creation through direct subsidies for the purchase of new efficiency products, increased product recycling and material recovery through “Old for New” programs, stimulating green consumerism and greening of supply chains through eco-credit programs (e.g., Japan’s EcoPoints, South Korea’s Green Credit Scheme), and retailer engagement and reduced programmatic costs through mid-stream, tiered incentive programs for efficient products.
Supporting multilateral award programs such as the Global Cooling Prize can help spur technological innovation by targeting manufacturers with a large award prize and global recognition, and showcases technological feasibility in significantly reducing climate impacts while being produced affordably and at scale.
Nine case studies of international programs have demonstrated that different types of market transformation towards high efficiency BATs are possible, ranging from targeting narrow but very ambitious efficiency improvements to enabling broader societal change towards more environmentally-friendly supply and consumption. By making specific design changes to differentiate from traditional standards, labeling and incentive policies and programs, these nine examples effectively helped accelerate the market adoption of high efficiency and greener products and services and achieved additional socio-economic benefits.