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Energy Department Considers Market Approach for Efficiency Standards

For the first time DOE may modify its appliance and equipment energy conservation standards program by adding a market-based mechanism similar to fuel standards for automakers. In its spring 2017 regulatory agenda, the department said it's evaluating whether to use "some of a market-based approach such as an averaging, trading, fee-base, or other type of market-based policy mechanism" for the program. Instead of providing a minimum level for energy efficiency for appliances, there could be a market-based model that sets an average efficiency standard. While this may make it easier for manufacturers to comply with the standards, it also could make it harder to verify compliance. Another possible market-based mechanism would be a tax on inefficient products like light bulbs. The energy efficiency program, which was authorized by the Energy Policy and Conservation Act of 1975, is required to periodically review standards and test procedures and issue new efficiency standards for more than 60 products, which represent 90 percent of home energy use.



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