ago and the equipment used in them is old. Improving energy efficiency by insulating old buildings and replacing old equipment with new heating units are expected to reduce energy consumption drastically.

In the EU, many countries are taking measures in order to comply with the 2002 EU Directive on the Energy Performance of Buildings. It requires Member States to introduce the following domestic systems by 2006: (1) setting of minimum standards of energy efficiency in new houses and buildings, (2) setting of minimum standards of energy efficiency in the renovation of large-scale houses and buildings, and (3) introducing an energy certification system for houses and buildings. The energy certification system for buildings requires the owner to prepare and present an energy efficiency certificate when constructing, selling, or leasing buildings. Providing consumers with various data on energy efficiency will add energy efficiency as a criterion in the decision-making of consumers. It also gives owners incentive to make the buildings more energy efficient. The 2006 EU Action Plan for Energy Efficiency points out that EU has the potential to reduce 20% of its energy consumption by 2020 by improving energy efficiency and that 11%, over half of the reduction, can be achieved by improving the energy efficiency of buildings.

Besides using regulatory measures in accordance with the EU Directive, Member States also implement various measures to help enhance the energy efficiency of buildings, including using subsidies and taxation to entice compliance by energy providers and voluntary actions from consumers.

For example, the United Kingdom requires its utility companies to assist consumers in energy conservation measures, such as insulation, to achieve the energy conservation target mandated by the country in accordance with the energy efficiency commitment (EEC). Germany focuses on providing assistance through policy-based finance. For instance, through a financing program that derives certain amount of funds from environmental tax, KfW Förderbank, a representative policy finance institution in Germany, offers low-interest loans to help insulate buildings, replace old heating equipments, and install renewable energy equipment to support energy conservation.

## B Measures in Japan

Japan will also continue to take measures to secure the necessary living standard and at the same time enhance the energy conservation function of houses and buildings. In addition to enforcing energy-saving measures for new construction, the Kyoto Protocol Target Achievement Plan also promotes renovation to enhance the energy conservation function of existing houses and buildings.

In terms of measures for new construction, Japan plans to amend the Law concerning the Rational Use of Energy to expand the requirement to report energy conservation measures for houses and buildings to small and mid-sized houses and buildings (smaller than $ 2,000 \, m^{2} $ ). The government also plans to issue orders to owners of large-scale houses and buildings (over $ 2,000 \, m^{2} $ ) found to have insufficient energy conservation measures.

Other measures are being taken to promote energy-efficient housing. They allow communities to employ creative means, such as utilizing loans, regional housing subsidies, support systems for Local Council for Global Warming Measures, etc.

The government is also making an effort to set up a system to promote renovation that improves the energy efficiency of existing housing stock, including establishing preferential taxation treatment for energy-efficient upgrades of existing housing, such as the installation of double sash windows.

To help consumers choose energy-efficient housing, the government plans to promote the Comprehensive Assessment System for Building Environmental Efficiency (CASBEE) for buildings and development of comprehensive methods to evaluate the energy efficiency of buildings, including housing equipment and facilities. The government will promote the provision of information to consumers through evaluation and labels of energy conservation performance.

## (2) Measures and Challenges to Improve the Energy Efficiency of Household Electrical Appliances

## A Measures Based on the Top Runner Standard

Japan’s per-household energy consumption for power/lighting, etc. is high, at about twice the level of that of Germany and about 1.5 times that of the United Kingdom (Figure 2-2-4). To advance energy conservation technology and enhance the energy efficiency of machinery and equipment, Japan put in place a regulatory standard (Top Runner Standard) to promote improvement in the energy conservation performance of each type of energy-intensive device. The Top Runner Standard refers to the energy conservation standard for each type of energy-intensive device (designated devices) specified by the Law concerning the Rational Use of Energy. It is set above that of the commercial product that has the highest energy conservation performance (Figure 2-2-5) at the