Making our homes more efficient can be as simple as eliminating obvious wastes of energy by insulating and weather-stripping, but making appliances more efficient demands hardcore engineering innovation. To make a refrigerator or stove or washing machine more efficient, companies must have incentive to invest large amounts of money in research and development.

Japan has found one way to ensure this happens: practice survival of the fittest. Japan's Top Runner program sets the efficiency standards for a wide variety of products (from vending machines to air conditioners to TVs) sold in Japan. On a regular basis, officials test all the products currently available in a category, determine the most efficient model, and make that model's level of efficiency the new baseline. The best available becomes the new normal. This drives other companies to try to make even more efficient models to compete, which in turn means the next time officials set standards, the best available products will be even more efficient.

As a result, Japan not only has one of the most energy-efficient economies in the world, it's improving even more quickly, and plans to be 30% more efficient than it is now (measured by energy use compared to economic growth) by 2030. When standards are raised quickly, innovation can happen even faster.