Do agreements enhance energy efficiency improvement? Analysing the actual outcome of long-term agreements on industrial energy efficiency improvement in The Netherlands

Since 1992, Long-Term Agreements on energy efficiency improvement have become the main policy instrument for energy conservation in The Netherlands. This paper investigates whether these agreements bring about improvements in energy efficiency additional to those that would occur anyway, were there no such agreements. The major part of the paper explores two possible methods to isolate the impact of the agreements on energy conservation. The first method, which is based on a bottom-up approach, assesses the actual outcome by analysing the effects that changes in the firms' investment behaviour have on industrial energy conservation. The second method, which is based on a top-down approach, assesses the actual outcome by comparing the monitored energy efficiency improvements with modelled, estimated efficiency improvements in the 'business-as-usual case'. The main conclusion is that between a quarter and a half of the energy savings in Dutch manufacturing industry can be attributed to the agreements.