“Integration and communication as

central issues in Dutch negotiated agreements

on industrial energy efficiency”

Greening of Industry conference, Cardiff, July 2006

By Hans Bressers, Theo de Bruijn and Valentina Dinica,

CSTM – University of Twente

Support by stakeholders

• More than just ‘attaining the feasible?’

• Approach very popular with business because of flexibility and role as serious partners

• After hesitations also acceptance and support from environmental NGO’s

• For government valued part of possible instrumentation mix

Negotiated agreement interaction processes

Negotiationon covenant

Covenanttext;Relations

Applicationnegotiations

Permit givingEnforcement

Standards;Env. plans;Relations

Permits +conditionsPressures

Behavior ofcompaniesinvolved

Emissionsand re-source use

- Stimulating collective learning processes (positive side effects)

- Extended implementation structure platform for communication and integration (follow up consultations)

- Potential for further innovations requiring multilateral cooperation (here “expansion themes”)

Three potential advantages of using a negotiated agreement

approach:

“To what extent are the potential advantages of using

a negotiated agreements strategy realized in the case of

the Dutch multi-annual agreement on energy

efficiency, and what factors favor or hamper such

achievements?”

Dutch energy use illustrated

Direct results• Earlier, quicker and more gains in

energy efficiency during the period 1998 –2002 than companies in the same sectors that did not participate

• Additional efficiency gains had a yearly linear factor of 1.43 compared with the national trend in energy efficiency

• Not all of the 17 sectors involved succeeded, while others did much better

• Additional process efficiency rather than the ‘expansion themes’

Dutch industrial energy efficiency (Source: CSTM)

50

60

70

80

90

100

110

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Asfaltindustrie

Chemische Industrie

Industriele natw asserij

Koel- en vrieshuizen

Metallurgische industrie

Olie & Gas industrie

Overige Industrie

Rubber- en kunststofverw erking

Tapijtindustrie

Textielindustrie

Groenten- & fruitverw erkende industrie

Koffiebranderijen

Margarine- vetten- & olienindustrie

Vleesverw erkende industrie

Zuivelindustrie

Opinions on general results (Source: CSTM)

Agree completely

Agree Neutral Disagree Disagree completely

Without the NA the efficiency gains would have been the same

0 4 8 64 24

Applying the energy tax could have lead to similar or larger results

0 16 23 27 34

Energy tax or European emissions trading could have resulted in more cost-effective measures

2 27 20 22 29

The NA can be monitored well 12 67 15 6 0 There is good compliance to the NA by the sector

17 60 23 0 0

The flexibility in phasing of measures in the NA enables the sector to avoid extra high costs

2 69 24 5 0

The NA leads to above-average process innovations

9 30 41 20 0

Very large Large Neutral Small Very small The chance that the targets for this sector will be attained within the period set, is

6 35 49 10 0

Building resources for the future (Source: CSTM)

Agree completely

Agree Neutral Disagree Disagree completely

As a result of the MJA negotiated agreement in general: Companies became more conscious of own responsibility

19 52 19 8 2

More mutual understanding 13 72 15 0 0 Improved cooperation 19 68 13 0 0 More knowledge 11 74 11 4 0 Better industrial energy policy of government ‘external integration’

8 86 2 4 0

As a result of the consultations in consultation groups: More knowledge 0 10 48 34 8 More mutual trust 4 62 28 6 0 More agreement on concrete tasks for the sector

8 77 15 0 0

More ‘internal integration’ 8 65 23 4 0 More ‘external integration’ 0 61 29 10 0

Side effects of NA’s use generally

• Companies have become more aware of their responsibility to combat the harmful consequences of their energy use (agreed by 71% of the respondents);

• Governments and target groups have gained mutual understanding of their points of view (85%);

• Improved collaboration between governments and the target group (87%);

• More knowledge on reaching ambitious energy efficiency goals (71%)

• Contribute to improvement industrial energy policy of government (‘external integration’) (94%).

Side effects of follow up consultations

• Important new knowledge on finding new options for energy efficiency improvements in the sector of industry (only agreed by 10% - obviously not a main consultation benefit - this result also validates that the respondents critically reviewed each item separately);

• Trust between government and sector has increased during the follow up consultations (66%);

• More agreement on the concrete tasks for the sector of industry (85%);

• A more coherent approach of energy efficiency improvements by the sector of industry (75%) (‘internal integration’);

• More tuning between the activities that stem from the agreement and other energy and environmental policies of government(s) (‘external integration’) (61%).

Type of interaction processes (Source: CSTM)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Energy Environment

Distrust and conflict

Hard negotiations

Passive cooperation

Active cooperation

Assessment of role various governments by other respondents (Source: CSTM)

0

20

40

60

80

100

Ministries Provinces Municiplalities

very good good neutral bad very bad

Expansion themes, assessment of potential

(Source: CSTM)

Agree completely

Agree Neutral Disagree Disagree completely

The expansion themes in general 19 54 19 6 2 Sustainable energy (buying and producing)

4 65 18 10 4

Sustainable products 8 67 10 14 0 Optimization transport, logistics and chains

11 79 6 2 2

Sustainable industrial estates (e.g. heat exchange)

12 47 29 12 0

Expansion themes, measures taken (Source: CSTM)

Very much Much Neutral Little Very little Improving process energy efficiency 8 41 45 4 2 Buying sustainable electricity 4 6 26 29 35 Producing sustainable electricity 2 4 22 35 37 Optimization functionality of products 0 9 62 22 7 Raw material savings in products 2 39 39 13 7 Decrease of energy use during product use

2 18 48 23 9

Optimization life span 3 23 54 13 8 Optimization discarding of product 10 21 44 18 8 Optimization (partial) re-use 5 28 44 16 7 Optimization transport, logistics and chains

2 22 51 18 7

Co-operation at sustainable industrial estates

0 0 44 33 23

- Stimulating collective learning processes (positive side effects) WORKS

- Extended implementation structure platform for communication and integration (follow up consultations) EXISTS

- Potential for further innovations (here “expansion themes”) UNDEVELOPED

Conclusions on three potential advantages of negotiated agreements

Recommendations to make also expansion

themes work

• An active intermediary utility

• Improving the integration of environmental and energy efficiency policies

• Further incentives for energy efficiency innovations in policy mix