A Discussion and Critique of Market transformation

....................................................................................................................................................................................................................i Report Summary...............................................................................................................................................................................................iii Lessons and Conclusions...............................................................................................................................................................................1 Background and Objectives .........................................................................................................................................................................1 Findings................................................................................................................................................................................................................1 Conclusions and Next Steps........................................................................................................................................................................6 Development and Application of Market Transformation..........................................................................................................7 Introduction: Emergence of Market Transformation.......................................................................................................................7 Definitions of Market Transformation....................................................................................................................................................8 Market Transformation Experience, Strategies, and Measures....................................................................................................9 Emerging Issues and Challenges.............................................................................................................................................................13 Confusing and Conflicting Definitions of Market Transformation .........................................................................................13 Inadequate Knowledge and Understanding of Consumer and Organizational Behavior...............................................14 Expectations for Market Transformation ............................................................................................................................................15 Evaluation Issues............................................................................................................................................................................................17 Policy Implications for Public Support of Energy Efficiency......................................................................................................19 Other Perspectives...........................................................................................................................................................................................21 Is the concept of market transformation realistic? Are there flaws in its underlying theory and premises? ........22 What are its strengths as a program model? Its weaknesses? Is it a useful model for publicly supported energy efficiency programs?.............................................................................................................................................................27 Are the objectives of market transformation realistic? What results are realistic to expect from market interventions? Can limited intervention lead to lasting changes in markets? Can you exit a market and expect changes to persist? ........................................................................................................................................................36 What rates of success should be expected for market transformation (in qualitative terms)? What time horizons are realistic for market transformation programs to achieve intended results?.....................................43 What are key research and data needs to develop, implement and evaluate market transformation programs? Do we know enough about consumer and organizational behavior within markets to yield the desired program responses from market transformation interventions? .................................................46 What strategies would be most effective for achieving market transformation? What parties need to be involved? What specific types of intervention are most effective? Can interventions have negative consequences?.........................................................................................................................................................................................54 What are the defining characteristics of a transformed market? Can these be measured? How?..............................60 Are there parallels in other industries or markets for market intervention to achieve social objectives? What approaches have been taken? What results have been achieved?.......................................................................62 What are the greatest challenges for market transformation programs to achieve their goals?..................................64 References ............................................................................................................................................................................................................71 Appendix: Respondent Biographies ....................................................................................................................................................A-1