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CLASP and Mark Ellis & Associates Publish Compliance Survey

16-Sep-2010

National energy efficiency standards and labeling (S&L) programs form an important element of most national energy efficiency policy portfolios. S&L programs are expanding in scope in response to the need for improved energy efficiency and the reduction of greenhouse gas emissions.

The study described in this paper focuses on the potential to improve the outcomes of S&L programs through ensuring that products within the scope of S&L programs adhere to the stated rules of these programs. This subject is often referred to as ‘compliance’ although it can also be broken down in a number of processes involving monitoring, verification and enforcement (MV&E).

There are numerous benefits associated with improving compliance rates in addition to increased energy savings and reduction in greenhouse gas emissions. High compliance rates in S&L programs safeguard the investment made by governments in building consumers’ confidence in their voluntary and mandatory energy labels, as well as the investment made by suppliers of energy efficient products. Conversely, there is also a risk that high rates of non-compliance will erode confidence in S&L programs and energy efficiency programs generally, which can have severe long term consequences for efforts to achieve climate change policy objectives.

To highlight the strengths and weaknesses in MV&E processes amongst S&L programs, the Collaborative Labeling and Appliance Standards Program (CLASP), with funding from Climate Works Foundation, initiated this survey spanning 14 countries. These included 30 mandatory and voluntary appliance S&L programs in Argentina, Australia, Canada, Chile, China, Germany, India, Italy, Japan, Mexico, South Korea, Tunisia, United Kingdom and USA.

The key findings from this survey are:

  • The majority of programs appear to have adequate legal basis to support compliance activities, although vigilance is needed to ensure that definitions remain relevant to current markets.
  • The majority of programs also have in place appropriate MV&E processes, although some enforcement procedures appear insufficiently flexible to be easily applied.
  • All respondents were able to clearly identify the entity or entities responsible for MV&E, and many noted that enforcement powers were included within the legal framework for the program.
  • While the legal and administrative frameworks underpinning programs identify appropriate procedures in most cases, it is apparent that there is considerable variation in the extent to which MV&E activities are carried out in practice.
  • As described by respondents, most programs have the capacity and processes for enforcement action. However, very few were able to provide detailed records of enforcement actions that had been undertaken in the recent past. The reasons for this are speculative, however it suggests that either there are few accessible records of these activities, or they occur very infrequently.
  • Few programs appear to have defined budget allocations and forward plans for MV&E activities; without these, there is a risk that MV&E activities may be viewed as discretionary and compete with resources for other aspects of program management.
  • Some comments from respondents indicate programmatic evaluations take little regard of compliance rates and therefore may be inaccurate.
  • There is considerable variation in MV&E structures used in different energy efficiency S&L programs and many examples of interesting approaches. For example a few programs have integrated border controls within their MV&E process, and most programs are coming to terms with the challenges of distance selling.

     

Based on responses from program administrators, the major recommendations are:

  • In order to ensure MV&E are undertaken in practice, governments should require the regular production of forward plans for MV&E activities and appropriate budgeting. Consideration should also be given to whether these requirements are included within enabling legislation for through administrative arrangements.
  • Ensuring that participants are aware of their obligations within S&L programs is an important first step to facilitating compliance and underpins any future enforcement actions. Well targeted information provision and regular surveys of industry awareness warrants increased attention by governments.
  • The lack of readily available records on MV&E surveillance and verification activities suggests that there is more that can be done to publicize whatever compliance processes are undertaken and their results. Governments should maintain records of MV&E surveillance and verification activities and make them publically available in order to highlight the risks of non-compliance.
  • Similarly, governments should keep better records of enforcement actions and make them publically available in order to make stakeholders aware of the range and frequency of enforcement activities.
  • Ensuring that all products within the scope of mandatory S&L programs meet program requirements is a complex and on-going task that involves several related processes. While there are different approaches to how this is achieved, the effectiveness of a program’s compliance regime would likely be improved considerably with the availability of a centralised listing of product models that are part of program. Such information can be gained through the use of market entry conditions involving registration or certification processes, and be used to increase the effectiveness of market surveillance checks.
  • While it is recognized that it may be appropriate that responsibility for day-to-day MV&E activities is shared amongst staff, it is important that their activities are co-ordinated and recorded. Governments should ensure clear lines of responsibility for MV&E activities within each S&L program.
    Where responsibility for MV&E is devolved to an entity other than that with primary responsibility for the program there may be issues of co-ordination. When responsibility is split, Governments should ensure that responsibilities are clearly identified.
  • To improve the accuracy of evaluations, governments should take account of compliance rates within program assessments.
  • There are considerable opportunities to rapidly improve compliance regimes through the sharing of experiences and approaches between programs. Governments should therefore devote more attention to establishing links with other S&L programs and exploring the transfer of expertise and information.
  • The results of this survey were found to be consistent with recent surveys on compliance activities undertaken in Europe (Fraunhofer et al, 2009; ATLETE, 2009).

     

The results of this survey indicate considerable potential to improve the MV&E structures and practices surrounding S&L type energy efficiency programs. With this would come greater certainty of outcomes and increased energy and greenhouse gas savings. Just as importantly, attending to issues of compliance is vital to maintaining confidence in these programs by participants and consumers, and therefore to maintain and raise future participation levels. Given the increasing importance of these programs within national energy and climate policies, the modest levels of investment required to improve MV&E practices are a pre-requisite to ensuring the outcomes desired by governments.

Author: Mark Ellis & Associates