Impact of energy-using product policies

Energy-using products (EuPs), such as domestic appliances, audio-visual and ICT equipment contribute significantly to CO2 emissions, both in the domestic and non-domestic sectors. Policies that encourage the use of more energy efficient products can therefore generate significant reductions in overall energy consumption and hence, CO2 emissions. To the extent that these policies cause an increase the average production cost of EuPs, they may impose economic costs on producers, or on consumers, or on both. In this theoretical paper, an adaptation of a simple vertical product differentiation model – in which products are characterised in terms of their quality and their energy consumption – is used to analyse the impact of the different EuP polices on product innovation and to assess the resultant economic impacts on producers and consumers. It is shown that whereas the imposition of a binding product standard for energy efficiency unambiguously reduces aggregate profit and increases the average market price in the absence of any learning effects, the introduction or strengthening of demand-side measures (such as energy labelling) may reduce, or increase, aggregate profit. Even in the case where the overall impact is unambiguously negative, the effects of product innovation and learning can be in either direction.

Product innovation and the costs of energy-using product policies

Energy-using Products (EuPs) contribute significantly to the United Kingdom’s CO2 emissions, both in the domestic and non-domestic sectors. Policies that encourage the use of more energy efficient products (such as minimum performance standards, energy labelling, enhanced capital allowances, etc.) can therefore generate significant reductions in overall energy consumption and hence, CO2 emissions. While these policies can impose costs on the producers and consumers of these products in the short run, the process of product innovation may reduce the magnitude of these costs over time. If this is the case, then it is important that the impacts of innovation are taken into account in policy impact assessments. Previous studies have found considerable evidence of experience curve effects for EuP categories (e.g. refrigerators, televisions, etc.), with learning rates of around 20% for both average unit costs and average prices; similar to those found for energy supply technologies. Moreover, the decline in production costs has been accompanied by a significant improvement in the energy efficiency of EuPs. Building on these findings and the results of an empirical analysis of UK sales data for a range of product categories, this paper sets out an analytic framework for assessing the impact of EuP policy interventions on consumers and producers which takes explicit account of the product innovation process. The impact of the product innovation process can be seen in the continuous evolution of the energy class profiles of EuP categories over time; with higher energy classes (e.g. A, A+, etc.) entering the market and increasing their market share, while lower classes (e.g. E, F, etc.) lose share and then leave the market. Furthermore, the average prices of individual energy classes have declined over their respective lives, while new classes have typically entered the market at successively lower “launch prices”. Based on two underlying assumptions regarding the shapes of the “lifecycle profiles” for the relative sales and the relative average mark-ups of individual energy classes, a simple simulation model is developed that can replicate the observed market dynamics in terms of the evolution of market shares and average prices. The model is used to assess the effect of two alternative EuP policy interventions – a minimum energy performance standard and an energy-labelling scheme – on the average unit cost trajectory and the average price trajectory of a typical EuP category, and hence the financial impacts on producers and consumers.

Sustainable freight: impacts of the London congestion charge and low emissions zone

This paper assesses whether two sustainability policies currently in effect in London, a congestion charge zone and a low emission zone, have affected freight operations and reduced vehicle kilometers travelled. It investigates responses by freight operators, including re-timing, re-routing, or reducing the number of trips, or replacing vehicles. Freight traffic trends from 1994 to 2012 were identified using road traffic estimates, cordon counts, and vehicle speed data and supplemented by interviews with freight industry experts and operators. Findings indicate that freight traffic increased throughout London during this timeframe, but declined in the central boroughs partly within the congestion charge zone. The congestion charge may have time-shifted some light goods trips, but most freight trips face a variety of constraints on operators’ delivery window. No evidence was found of re-routing of freight traffic or avoidance traffic around the charged zone. The low emission zone spurred higher levels of operational change than the congestion charge zone, and it was effective at spurring freight vehicle replacement. The paper also discusses freight operators’ perceptions of these policies and how they could be improved.

National Policies for Local Urban Sustainability: A New Governance Approach?

Cities have become a focal point for efforts to transition towards a more sustainable, low-carbon society, with many municipal agencies championing ‘eco city’ initiatives of one kind or another. And yet, national policy initiatives frequently play an important – if sometimes overlooked – role, too. This chapters provides comparative perspectives on four recent national sustainable city programmes from France, India, Japan, and the United Kingdom. The analysis reveals two key insights: first, national policy is found to exercise a strong shaping role in what sustainable development for future cities is understood to be, which helps explain the considerable differences in priorities and approaches across countries. Second, beyond articulating strategic priorities, national policy may exercise a ‘soft’ governance function by incentivising and facilitating wider, voluntary governance networks in the effort to implement sustainable city projects locally. This innovative role, however, depends on the ability of national policy to produce resonance among societal actors and on its effective interaction with formal planning processes.

Liver fat in adults with GH deficiency: comparison to matched controls and the effect of GH replacement

CONTEXT: Existing data regarding the association between growth hormone deficiency (GHD) and liver fat content are conflicting. OBJECTIVE: We aimed i) to assess intrahepatocellular lipid (IHCL) content in hypopituitary adults with GHD compared to matched controls and ii) to evaluate the effect of growth hormone (GH) replacement on IHCL content. DESIGN: Cross-sectional comparison and controlled intervention study. PATIENTS, PARTICIPANTS: Cross-sectional comparison: 22 hypopituitary adults with GHD and 44 healthy controls matched for age, BMI, gender and ethnicity. Intervention study: 9 GHD patients starting GH replacement (GH Rx group), 9 GHD patients not starting replacement therapy (non-GH Rx group). INTERVENTION: Intervention study:GH replacement for 6 months in the GH Rx group, dosage was titrated to achieve normal IGF-1 levels. MAIN OUTCOME MEASURES: IHCL content determined by proton magnetic resonance spectroscopy (1 H MRS). RESULTS: Cross-sectional comparison: There was no difference in IHCL content between GHD patients and healthy controls (1.89% (0.30, 4.03) vs. 1.14% (0.22, 2.32); p=0.2), the prevalence of patients with hepatic steatosis (IHCL of ≥ 5.56%) was similar in the two groups (22.7% vs. 15.9%; chi square probability = 0.4). Intervention study: The change in IHCL content over 6 months did not differ between the GH Rx group and the non-GH Rx group (-0.63 ± 4.53% vs. +0.11 ± 1.46%; p=0.6). CONCLUSIONS: In our study liver fat content and the prevalence of hepatic steatosis did not differ between hypopituitary adults with GHD and matched controls. In GHD patients GH replacement had no effect on liver fat content.