Effectiveness of China’s Labeling and Incentive Programs for Household Energy Conservation and Policy Implications

Abstract

With incomplete information about the potential benefits and costs of energy-using durables, households may be unwilling to invest in products that are more energy-efficient but also more expensive in purchase decisions. To deal with this problem, labeling policy has been developed to guide customers’ energy consumption decisions by providing understandable information to evaluate the energy efficiency of products. Over the last 20 years, China has implemented a series of mandatory and voluntary energy labeling and incentive policies to reduce energy use and improve the energy efficiency of durable goods in dwellings. This study has employed empirical survey data from the Chinese General Social Survey to study the implementation effectiveness of these policies and explore demographic factors behind consumer investments in energy-saving durables by using the logistic regression model. Statistical results show that energy efficiency labeling, incentive programs, education levels, and regional differences of customers appear to be strong predictors for investing in energy-efficient air conditioners and washing machines. House size is a decisive factor in driving consumers to choose energy-saving air conditioners. In light of the above results, the study suggests improved policy for motivating consumers to purchase energy-efficient appliances in dwellings.