Energy-Efficiency Policies in the Asia-Pacific
Can We Do Better?

Executive Summary

MAIN FINDINGS

The empirical evidence on the cost-effectiveness of energy-efficiency initiatives widely pursued by
governments is mixed. Despite the large descriptive literature on energy-efficiency and conservation
policies, there is a relative dearth of independent ex post statistical analysis that measures the true costs of
energy savings actually achieved. However, the road ahead for energy-efficiency policies in the AsiaPacific
is positive. Governments can play a constructive role in mitigating market failures while avoiding
wasteful subsidies and onerous mandatory performance standards with hidden costs that can lead to
unnecessary burdens being imposed on firms and households.

POLICY IMPLICATIONS

• Typical ex ante engineering and accounting studies of energy efficiency are based on parameters
that might not reflect actual conditions surrounding firms’ and households’ decisions to invest or
make purchases. It is critical that new regulations considered for energy-efficiency objectives
meet the tests of unbiased cost-benefit analysis.
• Randomized control trials and rigorous ex post analysis that takes into account actual consumer
responses should be the basis of establishing the likely welfare impacts of various government
energy-efficiency programs and initiatives.
• Before regulatory agencies consider intrusive forms of intervention to promote energy-efficiency
objectives—such as subsidies or the imposition of mandatory standards based on technology or
engineering criteria—it should be demonstrated that private decisions are flawed and
informational remedies are inadequate.

Tilak K. Doshi is Head of the Energy Economics Division of the Energy Studies Institute at the National
University of Singapore. Previously, he held senior positions as Executive Director for Energy at Dubai Multi
Commodities Centre, Specialist for Saudi Aramco, Director of Industry Analysis at ARCO in Los Angeles, Chief
Asia Economist for the Unocal Corporation in Los Angeles and Singapore, Head of Research at the Louis Dreyfus
Energy Asia in Singapore, Principal Consultant at Arthur D. Little in Singapore, and Head of the Energy Project at
the Institute of Southeast Asian Studies.

Nahim Bin Zahur is an Analyst in the Energy Economics Division of the Energy Studies Institute at the National
University of Singapore. He holds a bachelor of social sciences in economics, with a double major in political
science, from the National University of Singapore. His research interests include climate change economics, natural
gas markets, and the economics of energy security.

This working paper was commissioned by the Asia Pacific Foundation of Canada (APF Canada) and The
National Bureau of Asian Research (NBR) for the 2013 Pacific Energy Summit. The views in this paper
are those of the author and not necessarily those of APF Canada or NBR.