Technological Choice


DividerTechnology and the Environment

Impediments to energy efficiency

The ESD working group on manufacturing points out that manufacturing firms 'do not appear to have made full use of available technology and management practices with respect to energy efficiency' (ESD Working Groups 1991a, p. 98). The experience with solar heating has also shown that the existence of an energy- and cost-saving technology does not mean that it will be used. The Australian Bureau of Agricultural and Resource Economics has commented that:

it is not clear why efficiency measures which are said to be both available and cost-effective are not currently being implemented. It may be that there is some form of energy market failure … consumers are not aware of the potential benefits of more efficient technologies or practices, or they do not know the full costs of continuing to use inefficient technologies and practices. (quoted in ESD Working Groups 1991a, p. 99)

The various reasons for failure to implement new technologies, particularly energy saving technologies that are currently available, include:

  • the initial cost of these measures;
  • insufficient competitive pressure;
  • lack of awareness of energy costs and potential savings;
  • the belief that savings would be uncertain or insignificant;
  • the length of time required to get a return on the investment;
  • capital constraints and interest rates;
  • the life-span of old technologies already installed;
  • the low turnover of housing and building stock;
  • the lack of energy performance standards;
  • low electricity costs (especially off-peak electricity);
  • the vested interests of the utilities that supply electricity, and the subsequently low prices they offer to buy electricity from other sources for the grid;
  • the political power of the coal industry;
  • the lack of government funds for research, development and demonstration of alternatives;
  • overcapacity in the grid.

Refs: ESD Working Groups 1991a, p. 99; Industry Commission 1991, pp. 119&endash;19; Diesendorf 1991