Japanese Top Runner Program

Successfully stimulating energy efficiency
 

In many countries, the energy efficiency of electrical appliances is enhanced by Minimum Efficiency Performance Standards (MEPS). Japan followed a different strategy. Instead of setting a minimum efficiency today, its Top Runner Program searches for the most efficient model on the market and then stipulates that the efficiency of this top runner model should become the standard within a certain number of years.

A tradition of energy efficiency

Japan lacks domestic energy resources and the signing of the Kyoto Accords was an added stimulus for setting up energy savings programs. The Top Runner Program was developed in this context in 1999, on top of the existing Energy Conservation Law. It applies to machinery and equipment in the residential, commercial, and transportation sectors.

Weighted averages per manufacturer

The Top Runner Program sets targets by product category, for instance cars, TVs, or air conditioners. In each category, the most efficient model currently on the market is used to set the standard to be attained within four to eight years. By the target year, each manufacturer must ensure that the weighted average of the efficiency of all its products in that particular category is at least equal to that of the top runner model. This approach eliminates the need to ban specific inefficient models from the market. At the same time, manufacturers are made accountable and, perhaps most importunately, they are stimulated to voluntarily develop products with an even higher efficiency than the top runner model.

Elaborate procedures for setting standards

The Top Runner standards are set by committees with representatives from the manufacturing industry, universities, trade unions, and consumer organizations. They follow well-defined procedures. An efficiency standard for a product category will rarely be a single numerical value. In most cases, it will vary according to a basic index, for instance, the weight of a car, the size of a TV screen, or the power of an air conditioner. If certain additive functions of a product correspond to a high market demand, but make it virtually impossible to achieve target values, a separate category may be created. If the pay-back ratio of newly developed products complying with the standard becomes too low, two separate categories may be created as well: one for the expensive, highly efficient models, and one for the reasonably priced, low energy models. These kinds of flexible principles ensure that the Top Runner Program does not limit the consumer’s choice.

Brand image as a stimulus

The program has achieved good results, despite having relatively weak legal leverage. Manufacturers only have ‘the obligation to make efforts to achieve the target’. The real power of this programme lies in the fact that it puts the brand image of a company at risk. If a company is not able to meet targets or fails to make a good faith attempt at reaching the standard in spite of several warnings, this fact is publicized. Given the strong role that corporate pride plays in Japanese culture, this is something each company will make considerable efforts to avoid.

Consumers, in turn, are also made to assume a certain level of responsibility by a labelling system. Individual products that do not meet the target are not withdrawn from the market, but they receive an orange label, in contrast to a green label for the models which do achieve the top runner standard.