Designing and evaluating climate and energy policy

The climate and energy policy framework is a key driver for the performance of the European economy. We need to get it right.

Department for Business, Innovation and Skills, UK

Frontier undertook detailed modelling to assess the impact of Phase II of the EU Emissions Trading System on the competitiveness of key sectors in the British economy. This included developing detailed company and sector models across seven sectors. The models considered equipment, production processes and industry cost structures to understand the potential for carbon mitigation. The project then examined the impact of alternative Phase II allocations on prices, output and investment decisions of companies.

 

Department of Energy and Climate Change (DECC), UK

Frontier undertook a feasibility and impact analysis of five domestic energy efficiency policies aimed at reducing carbon emissions from households. The government was interested in understanding two issues. First, the costs and benefits, financial or otherwise, of a range of household energy efficiency measures (for example, insulation, window glazing, housing regulations). Second, the best institutional mechanisms to encourage cost-effective energy efficiency savings. We assessed different low carbon technology programmes that had been selected for funding. We monitored and evaluated them and developed a best-practice framework for DECC on this process.

Addressing climate change poses challenges for policy makers. Key questions include, how best to meet multiple targets and objectives and how to balance the costs and benefits. Costs include, for example, meeting targets through low carbon energy production, investing in equipment to increase energy efficiency and providing information to change behaviour. Increasingly, governments are also concerned about whether there are costs in terms of national competitiveness. Benefits include those resulting from avoiding the adverse impacts of climate change on the economy, individuals and communities – many of which will be realised for many decades to come. Benefits may also arise where new markets or industries are created and there are opportunities for economic growth.

We work extensively with clients including power companies, regulators, policy makers and consumers worldwide. This provides us with deep-rooted experience in understanding all sides of the issues so that our advice is both pragmatic and based on the best evidence.

We regularly undertake cost-benefit analysis of alternative policy options – either to appraise them before they are implemented or to evaluate them later. We account for the uncertainties facing policy makers when looking to the future. Our work deals with the realities of delivering effective policy in an increasingly competitive and fiscally difficult environment. We also help clients shape and design policies that meet objectives efficiently and effectively. This requires us to use innovative thinking to generate creative and credible options.

Read more about our energy work.

Department of Energy and Climate Change (DECC), UK

Frontier undertook a synthesis of research for the evaluation of the UK’s Renewable Heat Incentive. This involved analysing qualitative and quantitative primary research to gain an understanding of the impact that the policy has had on domestic and non-domestic consumers, on installers of renewable heating technologies, and to draw out learning that could inform DECC’s future development of renewable heating policy.

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