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GOVERNMENT SPONSORED PROGRAMS

Government Procurement

All governments are major energy users. Legislation or regulation to require purchase by federal, state and/or municipal governments of clean energy products and processes can do much to reduce green house gas emissions directly. Government procurements of green products also create markets to bring down their prices and set an example of the feasibility of their use for the private sector.

In the U.S., the government is the world's largest single buyer of energy-using products, accounting for over $10 billion of such purchases each year. The U.S. Government, through legislation and executive orders, has required that all U.S. federal agencies must use 30% less energy per square foot in their buildings than they consumed in 1985 and 35% less in 2010. In implementing these requirements, the Federal Energy Management Program requires the use of energy efficient lights and appliances in all its buildings and has adopted strict energy efficiency requirements for the construction of its buildings. All federal agencies are required to purchase only products that qualify for the ENERGY STAR7 label, or, where there is no label, are among the 25% most efficient products on the market. Renewable resources must be acquired wherever cost effective.

The program has saved the government agencies, and thus taxpayers, hundreds of millions of dollars in energy and pollution quantities and costs. The U.S. Government also is including energy efficiency specifications in its contracting guide specifications used for construction and renovation projects. For example, by adopting efficiency criteria, the U.S. Navy in just one year (1998) saved an estimated $1.2 million per year in reduced electricity use by 500,000 efficient (T-8) fluorescent lamps, 200,000 electronic ballasts and 20,000 light-emitting diode (LED) exit signs. And, as a part of a massive renovation program, the Departments of Defense and Energy just have installed photovoltaic panels on the Pentagon.

Government procurement programs involve payment of a premium up front, but result in very substantial long term savings. Governments can also require the purchase for their vehicle fleets of clean and efficient vehicles. Many municipalities in the U.S. are now purchasing electric and natural gas turbine buses. The City of Los Angeles, California has purchased a fleet of electric cars for municipal use and has installed recharging station for the public throughout the city.

In the U.S., city governments have been very aggressive about reducing their carbon dioxide emissions. Over 100 cities, representing 10% of global emissions, have joined the Cities for Climate Protection program to reduce these emissions by investing in public transportation, building efficiency measures, planting trees and installing solar collectors. Cities in other countries have taken similar action. Thus, Toronto, the first city to announce a climate plan, has undertaken to reduce its emissions by 20%. Saarbrucken in southern Germany, has already cut its emissions by 15% by measures including energy efficiency and public education.

Similar efforts are being made in other countries. For example: Australia utilizes best practices in government procurement through performance contracting; Finland has adopted a target to reduce heating energy and electricity consumption in its government operations; Ireland has a program to reduce energy consumption in all state buildings; and the United Kingdom has a five-year program for reducing energy in government facilities. Canada, through a Federal Building Initiative, has been successful in achieving energy savings by contracting with energy service companies (ESCOs).

A new program sponsored by the Danish Electricity Savings Trust, builds energy savings around a labeling requirement. It organized a group of large institutional buyers, including housing companies and local governments, to jointly procure at a very favorable bulk-purchase price up to 10,000 energy-efficient refrigerators that qualify for the top European Union efficiency label rating.

Government procurement actions to stimulate development of improved energy-efficient technology can also include the conduct of competitions to produce equipment with superior energy savings. A successful example was the U.S. government's "Golden Carrot" Super-Efficient Refrigerator Program under which a consortium of government, utilities and NGOs organized a competition to award a total of $30 million to the manufacturer offering the best new refrigerator that exceeded prevailing efficiency standards by at least 30%. The goal was met and many participating utilities also offered additional consumer rebates for it. Sweden has a similar, very ingenious program under which purchasing offices issue requests for proposals guaranteeing to buy a large number of devices at specified prices if they meet technical standards for energy efficiency and customer savings.

Governments also can aggregate procurements to make production of energy superior equipment economic for manufacturers. Technology procurement for energy-efficient products, pioneered in Sweden, subsequently has been used in the U.S., The Netherlands and Finland. Sweden's initial effort recruited housing cooperatives for a 1992 procurement creating a market for super-efficient windows that saved 60% more energy than standard Swedish triple-glazed windows. In 1995, the New York Power Authority and the New York City Housing Authority created a technology procurement project for new refrigerators that used 30% less electricity than those then on the market. And the International Energy Agency has sponsored a number of technology procurement projects for electric motors, heat-pump dryers, LED traffic signals and digital multifunction office copiers.

The U.S. Government has a Voluntary Reporting of Greenhouse Gas Program under which U.S. companies and organizations can report to the Energy Information their programs and achievements in reducing greenhouse gas emissions. As of January 4, 2000, 107 reports had been filed reporting 1,507 projects that claimed reductions or offsets of green house gas emissions in 1998 of 212 million metric tons of carbon dioxide equivalent, or about 3.2% of total U.S. emissions for the year. This
program is useful in allowing companies to obtain recognition for their accomplishments and to establish a record of what they have done for eventual crediting against U.S. emission reduction requirements under the Kyoto Protocol.

Technology Solutions & R&D

Greenhouse emissions from power plants and vehicles can be alleviated by the development of new technologies for the development of cleaner fuels and processes, which also make them more economically competitive. The United States is relying heavily on the development of new technology to meet its Kyoto Protocol obligations to reduce carbon dioxide emissions.

A few examples of the results of recent relevant R&D successes include the development of combined cycle natural gas power plants with double the efficiency and one-fourth the carbon intensity of coal-fired power plants. These plants are being widely adopted in the U.S. and around the world in countries with natural gas resources. Other relevant R&D successes include the development of variable speed drive electric motors that produce the same work for less than half the use of electricity as conventional motors; the development of compact fluorescent light bulbs which last four times longer and use less than half the electricity of incandescent bulbs; and efficient wind machines that have drastically cut their costs. Much successful R&D has been done in the area of building efficiency, with the development of better insulation materials, double or triple-glazed windows designed to utilize the sun's heat or protect from it, and many other innovations.

For the developing countries, technology transfer is a critical factor in enabling them to take advantage of energy efficiency and renewable technologies used in industrialized countries. Technical assistance and education of key energy players is essential to success. There are many such efforts being conducted around the world sponsored by governments and international agencies.

Improved technology offers great potential for developing countries to leapfrog to cleaner energy solutions. They can adopt the cleaner technologies from the start, avoiding the economic and pollution costs of using less efficient technologies and then having to replace them, as has been done in the industrialized countries. One example is China's CFC-free Energy-Efficient Refrigerator Project begun in 1989 to develop an energy-efficient CFC-free refrigerator. The final model, completed in 1996, demonstrated a 45% reduction in energy use. The Global Environmental Facility Project Development Funding then funded studies with several manufacturers for large scale production and distribution of the new refrigerator, demonstrating that even a 20% market penetration after 10 years would reduce China's carbon dioxide emissions by over 100 million tons over the life of these refrigerators. The United Nations Development Fund provided a $1 million technical assistance grant. The program thus leap-frogs to modern efficient refrigerator technology, providing China with major industrial opportunity with attendant jobs, consumer savings, power load reductions and significant reduction of pollutants.

There are numerous other government programs around the world to introduce energy-efficient technologies into the marketplace. One of note is the Philippine Technology Transfer for Energy Management program which provided energy audits, technical assistance and below market loans to more than 120 companies for adoption of energy-saving technologies, funded by $4.6 million from the U.S. Agency for International Development in 1985. The centerpiece was a Demonstration Loan Fund to demonstrate efficiency technologies and practices not widely used in the Philippines. Nearly 1,100 participants from the public and private sectors attended 25 seminars that were conducted nationwide under the program. Sixteen projects completed had an average internal rate of return of 41%, with very significant cost and pollution savings.

Some technologies not developed for energy purposes also can save a great deal of energy and pollution. For example, the Internet and telephone conferencing can reduce transportation energy, pollution and costs; e-mail and fax machines can reduce the energy, pollution and costs required for sorting and delivering mail; and cellular telephones can eliminate the need for expensive wiring which involves use of polluting fuels in its manufacture.

Some examples of technology R&D currently under way which could drastically reduce carbon dioxide emissions include development of hydrogen fuel cells utilizable in both power plants and vehicles; refinement and reduction of the costs of photovoltaic cell manufacture and of various kinds of central station solar power stations; manufacture of more affordable and efficient electric or hybrid vehicles and lighter weight more efficient batteries; coal gasification; a new generation of advanced reciprocal engine or micro-turbine engine, particularly well suited for combined heat and power applications; improved nuclear energy technologies; and development of carbon dioxide separation processes for hydrogen production and carbon dioxide sinks for storage and reuse. An insulated car has been researched that will reduce heating and cooling loads by 80 and 75 percent respectively, saving fuel and improving safety by reduced glare and heat.

Unfortunately, with the advent of increased global commercial competition and increasing privatization around the world, corporations have significantly decreased their long term R&D expenditures. Utility spending on efficiency R&D also has drastically declined, by 33% from 1993 to 1996, from $708 million to 476 million. As a result, if the benefits of new technology are to be achieved, governments will have to conduct the requisite R&D themselves or legislate the funding of R&D efforts; they could also mandate that a percent of sales be devoted by private entities to R&D or enter into partnerships with private companies to develop technologies that will reduce greenhouse gas emissions.

Recycling Programs

Many countries today have laws providing for the recycling of their waste paper, glass and metal products. For example, in Denmark, half of all waste is recycled and 80% of new paper is made from used paper. Almost every city in the U.S. has established a recycling program for paper, glass, plastic and metal wastes, with either curb-side pickup or establishment of a central recycling municipal facility. Many business and institutions not required by law to do so, recycle their waste products on a voluntary basis.

Education Programs

Education of the public is vital to let the people know the importance to them of taking the measures necessary to reduce carbon dioxide emissions; to build the political support necessary for enactment of appropriate legislative measures; and to inform them of the options available to them for carbon dioxide reductions, such as residential energy audits, insulation, purchase of compact fluorescent light bulbs and efficient appliances, and the financial mechanisms available to make these measures affordable. This educational process really should start at the primary and secondary school level and continue as a part of professional and technical training for those whose jobs will involve energy related-decisions.
Education is particularly important for architects, engineers, builders, commercial enterprise managers, trades people, and government officials at all levels, to inform them of the requirements of laws that have been adopted to promote carbon dioxide reductions and the costs and benefits of the measures they can take either voluntarily or pursuant to legal requirements . It is important that retail sales staff, contractor installers and maintenance/service personnel understand the benefits of efficient products and processes and can personally benefit from promoting these products to end users.

Much of this education must be conducted or contracted by governments, creating a legislative framework for this task and appropriating the funds for appropriate staff to do mailings, conduct workshops and conferences, and do media education work. As commercial enterprises learn of the economic advantages of measures that can be profitable for them, they also will participate in the educational efforts. NGOs advocating for the clean energy measures available also perform an important part of the educational efforts. Many NGOs have created Internet sites and list services to inform advocates and the public of renewable and efficiency resource opportunities and advantages. And political leaders can play an important educational role as well.

Labeling Programs

One effective educational measure has been adoption by countries and municipalities of energy efficiency product labeling requirements. Labeling is an inexpensive educational tool. The U.S., many of its states and cities, and many other countries and their municipalities have adopted such labeling requirements, giving energy consumption and cost-saving information about appliances such as refrigerators, electric stoves, clothes washers and dryers, computers and other appliances, essential for customers to make an informed choice. Appliance labeling has often been an effective precursor for the adoption of efficiency standards. New buildings can also be the subject of energy efficiency labeling requirements, as is required through building certification programs in Denmark and Canada. The U.S. and some other countries have a miles per gallon labeling requirement for vehicles sold.

Ratings

Ratings of companies on the greenness of their products also can be an effective educational tool. For example, the U.S. major environmental organizations, together with consumer and industry participants and the NGO Center for Resource Solutions, have established a AGreen-E@ clean electricity certification program. This program permits display of the Green-E logo if power providers meet very rigorous Agreen@ conditions: 50% plus renewables; for the remaining 50%, non-renewables with low emissions; full disclosure of electricity sources; no nuclear power generation; 1 year after deregulation, at least 5% new renewables, increasing 5% per year until 25% is reached. Also required is a commitment to biannual reviews of truth in advertising; and annual independent audits of renewable offerings. The rating is designed to inform electricity consumers of assured superior green power offerings. With the advent of deregulation in the U.S., a Power Scorecard also has been developed to rate the greenness of power plants, permitting informed consumer choice, being considered by the regulatory authorities for requirement by a number of states.

Awards

Lastly, many governments and private organizations have established award programs to recognize companies, private organizations and products that accomplish outstanding energy efficiency or renewable achievements. There also are a number of government information programs. For example, the Federal Trade Commission in the U.S. has issued AEnergy Guide@ labels and the EPA has its ENERGY STAR7 program. NGOs like the American Council for an Energy-Efficient Economy has issued guides to the most efficient home appliances.

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