The International Energy Agency (IEA) has released a report titled Market-Based Instruments for Energy Efficiency. The report was commissioned by G7 energy ministers and is the first global overview of its kind to examine the growth and impact of market-based instruments (MBIs) that target energy efficiency. The key policy design issues that were associated with the MBIs successful implementation are also examined in the report.

MBIs such as auctions, energy efficiency obligations on utilities and white certificate programs offer policy makers access to cost effective efficiency gains by allowing the market actors the ability to choose the most suitable measures and delivery methods. Since 2005 the number of MBIs worldwide have quadrupled. The investment generated by MBIs has also rapidly increased during this period.

The report outlines a number of key policy design issues such as:

• The need for MBIs to work within existing policy frameworks
• The need for obligations and auctions to have well crafted rules
• Flexibility within the programme design to allow for savings to be delivered across a broad range of customers and fuels
• Rules need to be as simple as possible but as complex as necessary
• Monitoring, verification and evaluation is a vital component for the integrity of the programmes

More information here.