Lack of Information

There is a pressing need for more information and the dissemination of that information on what is, or will shortly be, possible. Conferences and other discussions help, but industry and commerce are not solely composed of large firms. Small and medium-sized firms are not usually well represented at such meetings. There is a well-recognized need to target such firms with information on concepts and practices. One recognized route is through the influence of large enterprises on their supply chain. This observation does not imply that all small enterprises are unaware of the potentials of improving their energy efficiency or environmental performance. Indeed, it is often they who recognize market niches that go unnoticed by larger enterprises.

A feature of energy production and use is that the interactions and ramifications are so complex that it is not easy to arrive at or convey a straightforward message. There are also conflicting claims by protagonists, which may cause those in a position to act to be confused or dismissive.

Significance of First Cost

For many individual decision makers (especially homeowners), consideration of first cost dominates. There is often a lack of understanding of levelized cost-appraisal methods. To be interested in energy saving, the end user needs to be confident that the savings will materialize. To provide this confidence, there must be well-documented demonstration projects and substantiated indicators of performance. For commercial and industrial investors, there is always concern about the risk incurred by an early investor in an innovative system. Demonstration projects help to allay such concerns (Energy Efficiency Office, 1993).

The Legacy of Adam Smith

A Smithian perspective sees division of labor and functional specialization by enterprises as contributors to a nation's prosperity. Within a firm, the drive for competitiveness leads to pursuit of technical efficiency within the framework of costs and prices as seen by that firm.

Industrial ecology introduces a broader concept—the efficiency of an aggregate of firms within a system—which could be seen as a concept of social efficiency and a new political economy. It will involve bringing together, for mutual benefit, the objectives of individual companies and may result in partnerships between private companies or among government, public enterprises, and private enterprises.

Industrial-ecology-based systems may emerge as opportunities arise for changing the nature and purpose of a company. For example, equipment-supply companies or utilities themselves may decide to turn themselves into energy-service companies.

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