Voluntary Agreements on Energy Efficiency





Voluntary agreements can help to overcome resistance to investing in improved energy efficiency in industrial sectors. Voluntary agreements are contracts negotiated between industry and the government, which will often include targets, commitments and time frames, but offer companies greater flexibility to find the optimal time for the new investments into efficiency measures. Voluntary agreements have already resulted in significant increases in efficiency within industry, and have also been successful in encouraging a change in attitude and awareness of managerial and technical staff regarding energy efficiency. This may also lead to an increased market for efficient products and services.



The idea:


Voluntary, or negotiated, agreements can be very useful tools for overcoming resistance to new investments into increased energy efficiency in industry. With voluntary agreements, government and industry can negotiate an industry's approach to energy efficiency - including targets, commitments and time frame. Voluntary agreements usually have a long time frame, covering a period of about five to ten years in order for strategic energy efficiency investments to be implemented at the optimal time in the economic planning of businesses.


Governments can encourage industry to negotiate such agreements through the use of incentives and supporting programmes - such as facility audits, assessments, benchmarking, monitoring, information dissemination and financial incentives. These programmes both encourage industry to engage in the negotiating process, and assist the participating industries to understand and manage their energy use and greenhouse gas emissions, working towards reaching reduction goals.


There are many international examples of voluntary agreements, and many have proven to be very successful in motivating industry and improving energy efficiency. Over 25 voluntary agreement programmes currently exist world-wide, including in New Zealand, Australia, Canada, the Netherlands, Germany, Korea and Taiwan.


Voluntary agreements can be divided into roughly three categories: completely voluntary programmes; programmes which use the threat of future regulations or taxes as motivation for participation; and programmes which are implemented in conjunction with existing energy tax policies or other strict regulations. All of these categories have proven to be innovative and effective means of motivating industry to improve efficiency.


In addition to energy savings, voluntary agreements may also raise awareness regarding energy efficiency among industrial managerial and technical staff ultimately leading to more future investments in sustainable energy efficiency as well as the promotion of further research and development into efficient products and services.