Removal of legal barriers

Sometimes, law prohibits energy-efficient solutions. Examples could be the prescription of minimum washing temperatures (e.g. 40 °C), minimum brightness levels of computer screens, the prohibition to hang out clothes to dry in the sun, or other standards that favour inefficient technologies. Such legal barriers to solutions that can save a lot of energy should be re-examined and if possible removed. However, no further general recommendations can be given, since such legislation is highly country-specific.

Summary

In addition to the impediments resulting from prevalent market barriers, improvements of appliance energy efficiency can be hampered by regulatory barriers that discourage or even prevent respective private or public purchase decisions and thus hinder market transformation. In order to create an enabling governance framework for energy efficiency, governments need to review existing statutory frameworks and, where necessary, remove legal barriers to energy efficiency improvements. Since legal barriers may be quite diverse and highly country-specific at the same time, recommendations provided here mainly focus on the identification of common barriers rather than on how to tackle specific regulatory provisions.
Common legal barriers may for instance comprise energy tariffs or prices that discourage energy efficiency investments (e.g. declining block prices) or incentives to increase the amount of energy sold or transported, which are often induced by traditional price regulation approaches that encourage energy companies to increase rather than to reduce sales or invest in cost-effective energy efficiency (read more on regulatory changes to remove this barrier in the bigEE file on Regulation of energy companies).

In order to be most effective, the removal of legal barriers to energy efficiency should be combined with the introduction of financial incentives for the procurement/purchase of energy efficient appliances (e.g. tax credits and grants) and regulations that provide legal barriers for energy-inefficient appliances (e.g. mandatory Minimum Energy Performance Standards (MEPS)). The effectiveness of removing legal barriers to energy efficiency in appliances is difficult to assess in general, as they are highly oriented to the specific barrier addressed, the legal system and market situation in a country. We encourage users of the bigEE platform to send us information on successful examples.

Advantages and disadvantages

Advantages

The costs of removing a legal barrier to energy efficiency may be very low, as this might only require changing a piece of legislation.

Disadvantages

There may be resistance from market actors who might see their business position endangered. A compromise will need to be found in such cases that removes the legal barrier while accommodating such stakeholder concerns.

Implementation tips

Whenever energy efficiency policy for a specific type of equipment or appliances is planned or redesigned, it is worth the effort of collecting information from sector experts on whether there may be some legal barriers to the energy efficiency actions policy aims to support that should be removed first.

Find essential basics on this selected policy type and explore how this policy type applies

Aim of policy or measure

The removal of legal barriers aims at the adjustment of the existing legal framework in order to create an enabling environment for energy efficiency improvements. By removing regulatory disincentives for energy efficiency investments and statutory provisions that prevent or impede energy efficiency improvements, implementation of these policies paves the way for public and private entities to opt for energy efficient solutions.

Worldwide implementation status and governance level

Governance level
Policies to remove legal barriers to energy efficiency improvements may be implemented at all governance levels (national, trans-national, regional or local).

Sectoral focus

Related sectors

residential
services
industrial

Related appliances

Refrigerators and freezers
Clothes Washers
Clothes Dryers
Kitchen stoves and ovens
Coffee machine
Microwave
Dishwasher
Home Audio
Television
Monitors
Computer
Office equipment (Copiers, Fax machines, Printer, Server etc.)
Data centres
Commercial Food Cooling Equipment
Commercial Laundry equipment

Target group

The target group of this policy are those actors that are legally restricted or are faced with legal disincentives to behave in a more energy-efficient way or who choose/invest into energy-efficient solutions.

Related target groups

Governmental actor: Legislators need to act and remove the legal barrier in the first place. All other actors may assist in identification of barriers and of solutions to their removal.

Beneficiaries

Direct beneficiaries of this policy are those actors that are legally restricted or are faced with legal disincentives to behave in a more energy-efficient way or who choose/invest into energy-efficient solutions.

By removing legal barriers to energy efficiency in appliances, supply-side actors such as manufacturers and retailers may indirectly benefit from increased demand for their products.

Direct beneficiaries

Investor
User

Indirect beneficiaries

Manufacturer
Retail company

Barriers addressed

Legal barriers:
These are a special form of barriers not generally mentioned in the literature, because they are so special. However, the aim of this type of policy is exactly to remove such special barriers.

Relevant barriers

Knowledge and information barriers: The removal of legal barriers can successfully address informational uncertainties associated with the legal status quo, thus creating stable and favourable framework conditions for private and public energy efficiency investments.

Policy package

Find out how this policy type could be implemented and explore the associated factors and side-effects

Preconditions for implementation

The following pre-conditions are necessary to remove legal barriers:

Agencies or other actors responsible for implementation
These may be instrumental in detecting legal barriers, but the removal of these barriers normally just needs adaptation of legislation.

Funding
A change of legislation will normally not require special funding.

Test procedures
In rare cases, a special test procedure may be needed to allow entry of energy-efficient equipment using a new technology to the market.

Steps of design and implementation

Removal of legal barriers to energy efficiency should normally require three steps:

identification of the barrier and its impact
legislation to remove the barrier
monitoring whether the barrier has effectively been removed

Monitoring and evaluation

Monitoring
Monitoring the effect of changing legislation can be done with stakeholder interviews and case studies before and after removal of a legal barrier. Maybe, monitoring the market for the energy-efficient technology or solution that was legally impeded before the change in legislation will be possible.

Evaluation
Based on the results of the monitoring and information on the unitary energy savings and incremental costs for the energy-efficient technology or solution that was legally impeded before the change in legislation, it may be possible to evaluate overall energy savings and cost-effectiveness, depending on the concrete situation and barrier that was subject to the revision of legislation.

Policy dynamics and handling side-effects

Relevant individual dynamics and side-effects

Dynamic market transformation and/or innovation: The removal of legal barriers may boost market transformation as well as technology innovation.
Avoiding lost opportunities: By removing legal impediments to energy efficiency investments, the policy can help to avoid lost opportunities, i.e. investments that would not have been made were the regulation still in place.
Minimising rebound effects: Whether rebound effects may occur will depend on the subject of the legal barrier and the legislation removing it. All we can say here is that we recommend consideration on how to minimise rebound effects, e.g. through information and motivation campaigns accompanying the legislation or through setting absolute limits of allowed energy consumption in Minimum Energy Performance Standards.
Minimising snap-back effects: Unless the legislation is changed again in the future to reinstall the legal barrier, there should be no snap-back effects.
Minimising free-rider effects: A legal barrier impedes implementation of energy efficiency investment and other actions. This means the actions would not or only happen to a limited extent without removing the legal barrier, and so there will be no or very limited free-rider effects following removal of the legal barrier. Still, the issue should be considered in creating the legislation removing the barrier.
Creating Spill-over effects: Whether spill-over effects through market transformation may be possible will depend on the subject of the legal barrier and the legislation removing it.

Sustainability aspects and co-benefits

Design for sustainability aspects
The removal of legal barriers that impede energy efficiency action may also lead to other benefits, such as water savings, health and productivity improvements, and increased employment. When revising legislation, policymakers should also try to address other sustainability aspects.

Implementation barriers

The following barriers are possible during the implementation of the policy
Regulations that constitute barriers to the development and market penetration of energy efficient appliances may hold monetary benefits for some market actors (e.g. producers of less efficient appliances that benefit from the current legal status quo). Thus their removal may evoke political resistance among these stakeholders.

The following measures can be undertaken to overcome the barriers
Transparent communication of the rationale behind legislative changes, possibly even backed up by an impact assessment study, can help to overcome stakeholder resistance.

Find out the potential impacts of this policy type alongside energy savings and cost effectiveness.

Achievable energy savings

The effectiveness of removing legal barriers to energy efficiency and the potential energy savings are difficult to assess in general, as they are highly oriented to the specific barrier addressed, the legal system and market situation in a country. We encourage users of the bigEE platform to send us information on successful examples.

Expected costs

Costs will equally depend on the case of legal barrier concerned.

Expected cost savings

The cost-effectiveness of removing legal barriers to energy efficiency is difficult to assess in general, as it is highly specific to the specific barrier addressed.