6.2.2.5 Informational Instruments
As Chapter 5 shows, information drives decisions.
Information gaps result in uncertainties, risks, and missed opportunities. Poor
information is widely recognized as a barrier to improved energy efficiency
or reduced emissions (Tietenberg and Wheeler, 2000). Markets are not always
fully informed on the quality of information and application of decision-support
technologies. In Russia, for instance, it is estimated that institutional barriers
and information limitations result in only 2% of the market potential to improve
energy efficiency actually being realized (Bashmakov, 1998).55
Reliable data are a prerequisite for decision-making. At the micro level, feasibility
studies or business plans are used to explore opportunities to raise energy
efficiency and energy productivity. They are based on metering and energy audits
in specific situations. At the macro level, detailed statistical data on major
aspects of energy consumption are the basis for development and evaluation of
efficiency improvement policies, and their success or failure (Japan Energy
Conservation Center, 1997). Comparisons between nations and companies and benchmarking
on energy efficiency indicators also raise awareness and allow for better determination
of efficiency potentials (see also OECD/IEA, 1997; Fenden, 1998, p. 203; Phylipsen
et al., 1998, p. 230; ADEME-European Commission, 1999). Also, improved accessibility
to new technology information enhances technology transfer. Information-based
policies can also be used to reveal low levels of performance.
Policy instruments to improve information are applied on three levels. First,
they are used to raise awareness of climate issues. Governments communicate
their targets and policy measures to the public. The information may influence
preferences to contribute to GHG mitigation. Social marketing is becoming a
crucial instrument in creating an appropriate social environment for GHG emissions
reduction policies (Legro et al., 1999). Second, governments stimulate research
to analyze climate issues and create mitigation opportunities that can be widely
applied. R&D generates new information on possibilities and determines the
technical potential. Information on the economic situation (prices, taxes, interests
rates, etc.) in turn constrains the technical potential to what is commercially
feasible. Third, information instruments are used to help the implementation
of measures. They can assist the public in making the right choices with respect
to GHG mitigation.
There are several reasons for using instruments to further information on climate
issues. First, climate change involves complex negative externalities, so the
process of policymaking with regards to GHG reduction needs broad support and
understanding. Second, information, once generated, can be widely used, which
is regarded as a reason for collective funding of its collection, dissemination,
and use. Many of the possible ways to reduce GHG emissions are similar all over
the world. Markets for this information are not yet developed.
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