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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