The UNEP states that a regulatory control policy can effectively target energy efficiency in buildings. The study compared twenty different types of policy tools, including economic incentive, and concluded that regulatory and control instruments such as building codes and appliance standards are the best way to reduce energy use in buildings. The UNEP admits that for this policy to be effective sufficient resources and effort need to be in invested in order to implement and enforce these policies resourcefully.
If economic incentive were to be used to cut green house gas emissions by reducing energy consumption, an optimal energy use level would have to be determined. Then a permit system would have to be devised and implemented in order to reach the optimal level. A tax or fee could also be used to control the amount of energy being used. Using economic incentive could be more problematic since determining an optimal energy consumption level would be difficult. Different buildings, whether they are residential or commercial, will use different amounts of energy. Two factories that have production on the same scale could use very different amounts of energy to produce the same revenue. If a tax or fee system would be implemented it could possibly be more profitable for a firm to simply pay the fee and continue consuming energy. Also, it would be very costly to have to monitor such a vast amount of buildings of all different types.
It seems that the most effective way to decrease energy consumption is to require an increase in efficiency. This can be simply done by using better insulation or windows in buildings and using more energy-efficient appliances. This could also encourage the use of renewable energy such as solar panels or solar water heating to reduce a building’s energy consumption. A regulatory policy would give quicker results without having to monitor individual energy use and it would promote sustainable housing, research in improving energy efficiency, or at least the use of energy-efficient technologies. An economic incentive policy would require either a tax or permit system, would result in high costs to monitor energy use, and would be difficult to establish an appropriate energy level. As concluded by the UNEP regulation control would be a better approach to reducing green house gas emissions through improving energy efficiency in buildings.
"Sustainable Housing and Green Building News:." Environmental News Network -- Know Your Environment. Environmental News Network, 24 Sept. 2007. Web. 18 Nov. 2009.
It seems to me that most of the time, economic incentives calls for a more complex system, and one more difficult to maintain. Of course the pay-off is sometimes well worth the effort, but in cases like this, the simplicity of a regulatory control is clearly more effective anyway. And I also like the fact that it also promotes sustainable housing instead of solely penalizing energry consumption.
ReplyDeleteI see the issue that you present in regards to two factories with similar production but require different levels of energy. The way I see it, we're trying to limit greenhouse gases and if one factory is emitting more, they should be 'punished' accordingly. In this case, I think that economic incentives may help even though they may be more complex. Unfortunately, some people only act once the problem hits their wallet.
ReplyDeleteI agree that with this type of problem a regulation makes more sense than a tax. Many corporations are able to find loopholes and evasions when it comes to paying taxes and maybe if it was a regulation they had to follow in order to run as a company then they would be more inclined to follow the regulations.
ReplyDelete