Cost-efficient or not cost-efficient is not the relevant question

Panel: Panel 1: Assessment of Energy Efficiency Policy

Author:
Brita Olerup, Royal Institute of Technology

Abstract

Economic efficiency tends to be an important argument when different means of environmental control are assessed and suggested. Considering that the most cost-efficient means are not the ones most frequently chosen and used, some other qualities seem to play an equally important role.

I use findings from organisational theory and negotiation theory to better understand what is concealed in the black-box of decision-making and implementation.

My empirical material consists of case studies of four different means of environmental control used in Sweden during the 1990s to mitigate the threat of global warming. These are an environmental tax, a licensing trial, municipal energy planning, and technology procurement. Each represents a particular discipline (economic, legal, physical planning, or technological) in which a context (planning or market) and an approach (traditional relay race or process-oriented) are combined.

Although each means has its particular niche, some qualities stand out as superior. Such means need to be divisible in space as well as in time. It is then easier to get started. Since it is just as easy to deviate from, rather than adhere to, the predetermined course after a while, some incentive must be given to the person in charge of implementation.

In other words, the classic proverb of using sticks and carrots is still valid although it is not always taken to heart and practised.