Energy Types Table 3.10 Energy Policies and Regulations and Links to Cities

district heating systems. The degree of regulation and government oversight in the energy sector varies by country. In many large economies, the energy sector is governed by numerous policies and regulations and is infl uenced by a mix of government institutions because of concerns about energy security, market competition, social and environmental issues, and other considerations. The fees and charges for network-based energy services are usually regulated so that they respond to social concerns—for example, unduly high energy costs for the poor— and protect against monopolistic price gouging. The pricing of solid and liquid fuels is also often subject to government intervention through taxes and subsidies. Energy sector policies and regulations used to be supply-centric, but this has changed substantially since the fi rst oil crisis in 1973. Many countries now implement regulations and standards requiring minimum energy effi ciency levels in energy-consuming equipment, appliances, and building components. The standards are commonly called minimum energy performance standards. Governments may also initiate special policies and programs to create incentives for the adoption of renewable energy and energy-effi cient equipment. Table 3.10 summarizes the general elements of energy policies and regulations and the ways in which cities are aff ected or involved.

Institutions

The multitiered and multifaceted nature of energy sector management and regulation favors complicated institutional interactions. Box 3.6 provides an example of one of the more elaborate institutional and regulatory settings for urban energy planning and management.

The role of national and regional governments is critical. National and regional energy

Table 3.10 Energy Policies and Regulations and Links to Cities

POLICIES AND REGULATIONS EXAMPLES CITY GOVERNMENT ROLE

General legislation The Energy Policy Act (United States) Local enforcement Energy Conservation Law (China) Supply-side measures Sector-specifi c measures Power sector regulations Interactions only in local distribution or retail Oil and gas sector regulations Coal sector regulations District heating Pricing and billing regulation Strong involvement or autonomy Renewable energy Renewable Energy Law (China) Local implementation Mandatory market share policies Benefi ciary Feed-in tariffs

Demand-side measures

Minimum energy performance standards Appliance energy effi ciency standards Local programs to replace existing and ineffi cient Industrial motor energy effi ciency standards equipment Automobile fuel economy standards Corporate Average Fuel Economy (United States) Benefi ciary Building construction and renovation Building energy effi ciency standards Local enforcement Utility demand-side management Electricity rate decoupling Benefi ciary National and regional fi nancial and Subsidies for hybrid cars Benefi ciary fi scal incentives Tax credit for photovoltaic systems

Environmental protection Air pollutant emissions standards Local enforcement Benefi ciary

Source: Author compilation (Feng Liu).