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2013 -2014 Energy Efficiency Programs
<br />Local Government Partnership Program
<br />Program Implementation Plan
<br />coordinated effort of many stakeholders at the national level, directed to not immediate
<br />energy savings but rather to intennediary steps such as changing behavior, attitudes, and
<br />market supply chains 35 as well as changes to codes and standards. Resource acquisition
<br />programs rely upon the use of financial incentives, but concerns have been raised that these
<br />incentives distort true market price signals and may directly counter market transformation
<br />progress 36. According to Yorlc37, "Market transformation is not likely to be achieved without
<br />significant, permanent increases in energy prices. From an economic perspective, there are 3
<br />ways to achieve market transformation: (1) fundamental changes in behavior, (2) provide
<br />proper price signals, and (3) permanent subsidy."
<br />The question of what constitutes successful transformation is controversial because of a
<br />Catch -22: Market transformation is deemed successful when the changed market is self-
<br />sustaining, but that determination cannot be made until after program interventions are
<br />ended. Often, however, the need for immediate energy and demand savings or immediate
<br />carbon - emissions reductions will ]mean that program interventions may need to continue,
<br />which would interfere with the evaluation of whether MT is self - sustaining. Market
<br />transformation success has also been defined in terms of higher sales of efficient measures
<br />than would have otherwise occurred against a baseline absent of program interventions. The
<br />real world, however, provides no such control condition. Evaluators must estimate these
<br />baselines from quantitative factors such as past market sales that may be sparse and /or
<br />inaccurate - particularly for new products. Evaluations must also defer to expert judgments
<br />on what these baselines may have been as well as on the degree of successful market
<br />transformation 38. Due to the subjective nature of these judgments, it is imperative that
<br />baselines as well as milestone MT targets be determined and agreed upon through
<br />collaborative discussion by all stakeholders, and these targets may need periodic revision as
<br />deemed necessary by changing context.
<br />Market transformation draws heavily upon diffusion of innovation theory39, with the state of
<br />a market usually characterized by adoption rate plotted against time on the well -known S-
<br />shaped diffusion curve. In practice, however, the diffusion curve of products may span
<br />decades40. Market share tracking studies conducted 3, 5 or even 10 years after the start of an
<br />MT program may reveal only small market transformation effects 41. The ability to make
<br />causal connections between these market transformation effects and any particular program's
<br />activities fades with time, as markets continually change and other influences come into play.
<br />34 Blumstem, C., Goldstone, S., & Lutzenhiser, L. (2001) "From technology transfer to market transformation ". Proceedings of
<br />the European Council for an Energy Efficient Economy Summer Study. Available at
<br />http:H/ .ecece.org /conference _proceedings /eceee /2001 /Panel_2 /p2_7 /Paper/
<br />" Sebold, F. D, Fields, A., Skumatz, L., Feldman, S., Goldberg, M., Keating, IC, Peters, J. (2001) A Frameworkfor Planning
<br />and Assessing Publicly Funded Energy Efficiency. p. 6 -4. Available at www.calmac.org.
<br />16 Gibbs, M., and Townsend, J. (2000). The Role of Rebates in Market Transformation:
<br />Friend or Foe. In Proceedings from 2000 Summer Study on Energy Efficiency in
<br />Buildings.
<br />37 York, D., (1999). "A Discussion and Critique of Market Transformation ", Energy Center of Wisconsin. Available at
<br />http://www.eew.org/ecwresults/I 86-l.pdf
<br />ss Nadel, S., Thorne, J, Sachs, H., Prindle, B., and Elliot, R.N. (2003). "Market Transformation: Substantial Progress from a
<br />Decade of Work." American Council for an Energy - Efficient Economy, Report Number A036. Available at:
<br />http: / /www.acece,org /pubs /a036full,pdf
<br />sy Rogers (1995) Diffusion of Innovations, 5`h Fit
<br />4° Example in bottom chart of this graphic from NYTimes:
<br />http : / /www.nytimes.coiiVimagepages/ 2008 /02/10/ opinion /l0op.graphic.ready,html
<br />" Sebold et al (2001) p. 6 -5, 25C-57
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