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VOLUNTARY PROGRAMS

Industry Programs

One result of government education on global warming is that a remarkable number of major corporations around the world have publicly recognized the risks of climate change and voluntarily embarked on major emission reduction initiatives. Thus in 1998, British Petroleum President, John Browne, broke ranks with the rest of the oil industry and announced that, recognizing the severe threat of climate change, BP was embarking on a voluntary program to reduce its carbon emissions to 10% below 1990 levels by 2010, which constitute a 40% reduction from business-as-usual emissions growth. Royal Dutch Shell, the world's biggest oil company and Enron Corp., North America's largest natural gas company have since followed suit.

While this action by members of the petroleum industry is most remarkable, major companies in many other fields have taken similar action, finding that production of more efficient products and adoption of energy saving processes is adds to profits and is simply good business. Thus, Toyoto has started to market in Japan and shortly will bring to the U.S. the world's first hybrid electric car, the Prius, with twice the fuel economy and half the carbon emissions of conventional cars. Honda will shortly begin marketing its own hybrid vehicle, the Insight, with a fuel efficiency of more than 60 miles per gallon. These developments inspired even General Motors President John Smith, to say in a 1998 speech, "No car company will be able to survive in the 21st century by relying on the internal-combustion engine alone."

A few other examples of major U.S. companies that have embarked on voluntary programs: Johnson & Johnson set a goal in 1995 of reducing energy costs 10% by 2000 in 96 of its U.S. facilities, and has already met 95% of that goal with a payback of 3 years or less for most of the projects undertaken. And Dupont announced in September 1999, that it would reduce greenhouse gas emissions worldwide by 65% from 1990 levels while holding total energy use flat and increasing its use of renewable resources by 10% B and this is on top of a previous commitment to reduce energy intensity 15% by 2000 from 1990 levels, which it is on track towards achieving.

A major problem for industrial energy managers is that the suppliers often don't stock efficient motors and other appliances because there is insufficient demand for them due to lack of information. This stock problem was solved ingeniously by B.C. Hydro of Canada, which paid a small, temporary subsidy to suppliers to stock only efficient models. In three years, the market share of premium-efficiency motors soared from 3% to 60%, and the subsidy was phased out. Similarly, PG&E in California paid refrigerator distributors a small bonus for each efficient model stocked, but nothing for
inefficient models, which quickly vanished from the shops. PG&E found that the vendor subsidy improved refrigerator efficiencies faster, at less than a third the cost of giving rebates to end users.

Government Sponsored Voluntary Programs

The U.S. Government has relied heavily on voluntary programs and partnerships with industrial companies to achieve energy efficiencies that will reduce pollutants and carbon dioxide emissions. Most notable is its 1991 Green Lights program under which companies agree to capture cost-effective lighting energy saving and in turn are allowed to advertise participation in the program. Since green products are popular with consumers, this certification is of value to the companies. The program also gives informational, technical and trade-ally support. As of 1997 the program involved more than 2,300 organizations and its retrofits were saving over half the lighting energy with 30% return on investment; the national potential for this effort alone has been estimated to be $16 billion annual savings with a 12% reduction in utility carbon and other emissions.

Other countries have emulated this program. For example, in 1996, China began a Green Lights Program in cooperation with the U.S. sponsored Beijing Energy Efficiency Center and a committee of outside experts, with the on-target goal of increasing the use of high-efficiency lights to 300 million units by 2000, resulting in
electricity savings of 26.8 TWh and peak load savings of 7.2 GW, along with large avoided costs for new electricity power plants. Pollution savings are estimated at 200,000 metric tons of sulfur and 7.4 million tons of avoided carbon emissions annually by the Year 2000.

The U.S. Government has also initiated the AENERGY STAR7@ program that gives technical assistance and recognition to companies that market very efficient equipment. This program has been highly successful in promoting market transformation measures, which establish new energy efficient products in the marketplace. For example, the ENERGY STAR7 office equipment program convinced most manufacturers to produce only copiers, computers, etc. that automatically switch to a low energy consumption mode when not in use. And an ENERGY STAR7 program is successfully advancing horizontal-axis clothes washers, familiar in Europe but only recently introduced in the U.S., which use half the water and one-third the energy of conventional U.S. models. The program was saving half a billion dollars per year in 1997 and was estimated to save nearly double that by 2000 with a profitable 10 million ton per year carbon saving by 2005. The program also encourages industry to convert to energy efficient motors and EPA is considering the adoption of motor standards.

Canada started a Voluntary Challenge and Registry (VCR) program as a part of its National Action Program on Climate Change in 1995, which became an independent private/public partnership in 1997. Its purpose is to spur voluntary actions on climate change and publicize them. Two-thirds of its funding is from the private sector, the rest from the federal and provincial governments. In its first 3 years, Canada's VCR program registered about 700 companies and organizations. Resulting carbon dioxide emission reductions totaling just over 9 metric tons of carbon were reported, about 6.5% of Canada's fossil fuel carbon emissions in 1998.

Agreements between government and industry have resulted in substantial energy intensity reductions in European countries such as Germany, which committed in March 1996 to reduce carbon dioxide emissions by 20% between 1990 and 2005, the Netherlands and Denmark. Belgium, France, Spain and Norway are in the process of negotiating voluntary agreements with their principal energy-intensive industries.

U.S. Foundation Programs

A number of charitable foundations in the U.S. have undertaken major climate change programs. A few examples: The Pew Charitable Trusts recently created a Pew Center On Global Climate Change, initiating a major program to solicit business participation in climate change mitigation. The Pew Center also has initiated a major advertising and public relations program to educate the public and government officials on the importance of action to mitigate carbon emissions and to promote U.S. ratification of the Kyoto Protocols. The Pew Center is now funding a series of studies under the rubric, Developing Countries and Climate Change: Electric Power Options for Growth. Studies on India and Korea were issued this year, and reports are under way for Argentina, Brazil and China. The MacArthur, Pew and Rockefeller Foundations joined together to create a new Energy Foundation about eight years ago. The Energy Foundation funds programs throughout the U.S. promoting energy efficiency and renewables in electricity and vehicle efficiency improvements. Recently, it has joined with the Packard Foundation to promote carbon mitigation in China.

One particularly successful effort has been the establishment of Energy Efficiency Centers in the formerly planned economies of Eastern Europe and China, a project overseen by the U.S. Department of Energy's Pacific Northwest National Laboratory. Start-up funding was provided by the U.S. Environmental Protection Agency and Department of Energy, the World Wildlife Fund, the Charles Steward Mott Foundation and the John D. and Catherine T. MacArthur Foundation, and uniquely, each of the centers has been successful in becoming self-funded after the initial project funding ended. Some 250 local and international companies now participate in center projects. The centers partner with suppliers of modern energy-efficient equipment and services and in-country collaborators. Six centers were established as not-for-profit, non-governmental independent entities in Poland, The Czech Republic, Russia, Bulgaria, China and The Ukraine. In the nine years since the first center was established they have achieved remarkable results in reforming local laws to promote energy efficiency and effectuate technology transfers.

A few examples of Center successes: The Russian center helped develop the first regional level code for energy efficient building construction; The Czech Center helped draft a national energy policy and legislation for energy labeling and standards provisions. The Polish center developed a program for utility energy efficiency investments. The Bulgarian center helped adopt appliance efficiency standards. The Beijing Center provided expertise in instituting Integrated Resource Planning for a major utility and persuaded it to substitute demand-side management for a planned coal-fired power plant. The centers have focused on policy reform, private sector assistance for joint energy technology and service ventures, demonstration and training, and public education and information dissemination.

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