Energy Efficiency in Developing Countries

Policies and Programmes

Suzana Tavares da Silva,Gabriela Prata Dias

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000034134
• Edition: 1
• Topic: Sciences physiques
• Subtopic: Énergie

This book presents a comparative analysis of energy efficiency policies in developing countries.

Although there is a vast amount of literature available about renewable energy policy and implementation in the developing world, energy efficiency tends to lack attention. This book fills this lacuna by examining the current state of the field and scope for future improvements. Drawing on a wide range of case studies including Brazil, China and Chile, the authors use a comparative approach to examine the policies and programmes being implemented, looking at the existing legal frameworks and regulatory challenges. By showcasing stories of success, as well as barriers to energy efficiency, they highlight the opportunities for increased energy access and efficiency and demonstrate how these opportunities may directly impact on climate change mitigation.

This volume will be a useful resource for scholars and practitioners with an interest in energy policy and efficiency, climate change and international development.

Part I

Overview of energy efficiency policies and programmes and their implementation

1 Energy efficiency policies and programmes in developing countries

A handful of opportunities

Suzana Tavares da Silva and Gabriela Prata Dias

Overview of the international environmental and sustainability commitments

Energy efficiency (EE) is all about doing the same (or more) with less amount of energy input, i.e. having the same or better service, producing the same or better products, travelling the same or a larger distance or cooling the same space or a bigger one, using a smaller amount of energy.¹ Energy efficiency is a broad concept, usually related to the need to find sustainable economic measures,² i.e. solutions to keep growing and, simultaneously, achieve environmental ambitions.³

In recent years, the international community finally assumed that realising developing countries’ energy efficiency potential is crucial to limit climate change.⁴ International environmental and sustainability goals, specifically those approved in the framework of the United Nations (UN) are now essential to outline strategies and encourage investment in energy efficiency. However, the focus is not only at the international level but also on the different regional political and economic blocks,⁵ as well as on domestic policies.⁶ Harmonising these objectives with the surge in energy demand throughout the world, especially in developing countries, is one of the main challenges for policy makers already today and increasingly in the coming years.

Climate change is a global issue, and the UN develops essential efforts to tackle it. Today, a central document is the UN 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs), adopted in 2015 to be achieved by 2030. They are transformational goals that envisage a better society, shaped on the values of human dignity, equality and sustainability. Goal 7 targets to ‘Ensure access to affordable, reliable, sustainable, and modern energy for all’ and defines an ambitious 2030 target of doubling the global rate of improvement in energy efficiency.

The United Nations Framework Convention on Climate Change (UNFCCC) and the commitments under the 2015 Paris Climate Agreement⁷ play a fundamental role in addressing decarbonisation⁸ through mitigation of greenhouse gases (GHG)⁹ and adaptation to climate change. The UN SDGs and the 2015 Paris Climate Agreement are also closely linked to a process that is commonly designated as the energy transition.¹⁰ In literature, energy transition usually means a shift from fossil fuels (coal, oil and natural gas) and nuclear electricity generation systems to renewable energy-based ones.¹¹ However, energy transition is a comprehensive process that also embraces governance and regulatory changes^12,13 and the adoption of energy efficiency.

While binding just on the member states that have ratified it, the Paris Agreement is a mandatory global document that influences other international and national legal statutes and rules, many of them regulating more concrete aspects of a global political goal: sustainable economic development.

One of the most recent instruments to combat climate change is the Kigali Amendment to the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer. Adopted in Kigali, Rwanda, in 2016, by the 28th Meeting of the Parties, this Amendment addresses the reduction of hydrofluorocarbons (HFCs), which have increased significantly, mainly because of their use in cooling equipment, as an alternative to ozone-depleting substances. This Amendment entered into force on 1 January 2019, and under it, all countries will gradually phase out HFCs by more than 80 per cent and replace them with environmentally friendly alternatives. Developing countries should stop HFCs use levels in 2024–2028 and can benefit from capacity building to achieve those targets.

Explicitly on energy efficiency, is the Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA), an integral part of the Energy Charter Treaty that entered into force on 16 April 1998 and is signed by 56 countries. The PEEREA Protocol provides its members with a benchmark of good practices and a forum to share experiences on successful energy efficiency measures and policies (e.g. on energy taxation, pricing, subsidies, and other economic and financial tools), as well as the energy cycle’s environmental impacts.

Finally, the Global Covenant of Mayors for Climate & Energy is an informal international network forum of over 9,000 cities and local governments from six continents and 132 countries. In this framework, local authorities develop sustainability plans, set targets, and share experiences, best practices, administrative and regulatory tools that could collectively potentially reduce 1.3 billion tonnes of CO₂ emissions per year.¹⁴ Other initiatives exist on a voluntary basis, like the C40 network of megacities of the world which embrace climate action towards a healthier and more sustainable future.

The European Union (EU) is pushing hard to accomplish all those goals and is leading the process in different ways, not only by fixing ambitious energy targets and mandatory programmatic Directives to be addressed by all its Member States,¹⁵ but also by a ‘greening’ sectorial public policy strategy, from e.g. common agriculture policy¹⁶ to public procurement.¹⁷

Alignment of energy efficiency with political will

According to Article 4.2 of the Paris Agreement, each signatory Party to the UNFCCC shall prepare, communicate and maintain Nationally Determined Contributions (NDCs). NDCs are actions that countries shall undertake to reflect their efforts post-2020 to address climate change and in line with the overall ambition of the Agreement. NDCs should be updated every five years, if not before, to increase their ambition and reflect the information necessary for clarity and transparency. Least Developed Countries and Small Island States benefit from a special provision to develop their NDCs, reflecting their special circumstances (Article 4.6). Most developing countries make at least part of their mitigation actions inscribed in the NDCs conditional to receiving support, be it financial, technological or through capacity building.¹⁸

Transparency and accountability is also a pillar of the Paris Agreement (Article 13). The purpose of this framework for transparency of action is to provide a common reporting methodology and track the progress towards the UNFCCC objectives and the NDCs. There are also specific provisions regarding developing countries for the implementation of this article and in-country capacity development.

Energy use alone is responsible for about two-thirds of the greenhouse gas emissions worldwide.^19,20 Global primary energy demand rose by 1.9 per cent in 2017, the largest annual increase since 2010 and well above those in 2015 and 2016. Most of the increase came from emerging economies, where demand increased by 2.7 per cent, or 9.2 exajoules (EJ) compared with 0.7 per cent (1.5 EJ) in advanced economies.²¹ Energy efficiency is a mitigation approach that is often used and inscribed in the NDCs, as references show that 128 of the 197 Parties mention this²² and 79 developing countries and emerging economies refer quantitative targets associated to it.²³ Countries decide on targets, policies and sectors to meet their long-term commitment to reduce energy demand. Energy efficiency actions in energy supply and services, buildings, industry and the transport sector are referred to in NDCs as mitigation opportunities.

Energy efficiency is the least cost and the ‘low hanging fruit’ tool for combating pollution and therefore climate change, through their inherent reduction of energy use by cutting primary energy demand. The cheaper energy unit is the one that is not used, also referred to as the ‘negawatt’.²⁴ However, this resource is still underutilised and denoted by the International Energy Agency (IEA) since 2013 as ‘the first fuel’, because it is widely available worldwide and has a savings potential of more than 20 per cent of the current energy demand,²⁵ so it is an energy source in its own right.

From a marketing angle, energy efficiency is however not attractive as it does not entail visual impacts, apart from a reduction on the energy bill, and can hardly serve as ribbon-cutting for policy makers and government officials, unlike renewable energies, for example. Energy efficiency is often difficult to understand for generalists as processes and techniques are sometimes too technically sophisticated. There can be also political hindrances to energy efficiency, in the form of political-institutional barriers, such as political opposition, conflicting interests, and lack of coordination or just indifference.²⁶ Therefore, there should be a strong component of political will backing energy efficiency policies for changes to occur, for that proper information should be in place. Barriers are repeatedly mentioned by analysts of energy efficiency, and are associated with lack of capacity or ‘imperfect information’²⁷ of energy users, financial institutions and policy makers. Nonetheless, political understanding of energy efficiency is critical so that policies and programmes are designed and taken seriously for societies to move away from ‘business as usual’ solutions, like increasing electricity capacity generation based on fossil fuels or maintaining a non-responsible use of energy.

Apart from local information, capacity, visibility of projects and political will, there are other institutional, social and market barriers frequently associated with energy efficiency deployment. Fossil fuel subsidies distort energy prices and markets, high-transaction costs of energy efficiency projects limit their access to finance, energy user in...