Effectiveness of Energy Efficiency Standards and Labeling Requirements: The Case of Air Conditioners in Japan, Thailand, China and India

Abstract

This chapter evaluates whether standards and labeling programs aimed at improving the energy efficiency of electrical appliances have been successful at achieving their goals. Standards and labeling programs work to reduce energy consumption by (a) influencing consumers’ choice of appliance and (b) inducing manufacturers to improve the energy efficiency of their products. In Most middle- and high-income countries first introduced mandatory minimum energy performance standards (MEPS) and/or multi-grade labeling and then added high energy performance standards (HEPS) that upgraded those standards. Analysis of product-level data for the air conditioner markets in Japan, Thailand, India and China yielded the following findings: (1) Standards and labeling programs appear to be effective at changing energy efficiency levels in the marketplace. There has been a clear improvement in the energy efficiency of air conditioners, measured by such indexes as coefficient of performance (COP), energy efficiency ratio (EER) and annual performance factor (APF) in Japan. (2) More energy-efficient products are priced higher in Japan and India. (3) Japan succeeded in reducing electricity consumption from air conditioners by one-half, but neither Thailand nor China succeeded in curbing electricity consumption. Appropriate fine-tuning of policy instruments is necessary to effectively reduce electricity use by air conditioners. An example is the introduction of a rule-based mechanism to revise minimum efficiency standards regularly. Cross-country harmonization of regulatory methods, such as methods to measure energy efficiency and revise efficiency standards, may also be beneficial.