Stanford report calls for subnational governments to unlock global Energy Efficiency potential

4 April 2012

LONDON: A new report published by Stanford University for The Climate Group, entitled Energy Efficiency Financing, aims to leverage the power of sub-national government to unlock the global potential of energy efficiency

The report recognizes that while energy efficiency measures provide one of the most cost-effective ways to cut global greenhouse gas emissions, the market has not yet reached its full potential, owing largely to financial barriers. These include both supply and demand-side financing constraints.

To accelerate the market, the report aims to identify key barriers and analyze how these are addressed by the different policy instruments available at the regional level. The report’s introduction states that it aims to: “further unlock the EE [energy efficiency] potential, address the above knowledge gap on policies to finance EE measures, and leverage the power of sub-national government action, where possible, to address this global challenge.”

The report analyzes the experiences of five regions where various energy efficiency financing programs have already been carried out, through case studies of California, USA; North Rhine Westphalia, Germany; New South Wales, Australia, Gujarat, India; and Guangdong, China.

Using the five regions, it explores how to overcome existing financing barriers by finding common factors and effective methods. It concludes that no one-size-fits all approach can be recommended, but that different policies can be used within the specific circumstances, and proper design and implementation are at least as crucial as the choice of instrument.

Across the regions, results show that the impact of energy efficiency financing polices depends on four complementary factors: 

  • The country’s socio-economic conditions
  • The choice of financing policy instruments
  • Policy instruments’ design and implementation method
  • Non-financial policies that support uptake

The report concludes by developing a framework and process recommendation for how regions can assess the options available to them and identify the most effective and cost efficient policy mix to overcome the specific barriers they are facing in their constituency.

Luc Bas, Director of European Programs and International States and Regions, The Climate Group, says: “Energy Efficiency is a key element of reaching the emissions reduction goals we need, and States and Regions can play an important role in promoting the necessary investments. The study is a valuable step towards a better understanding of the different instruments available at the sub-national level, and it clearly illustrates the immense benefits that can be gained from a global exchange of experiences and best practices. Our States and Regions Alliance is well-placed to continue this work and bring together the expertise of further practitioners to develop practical recommendations to take this agenda forward.” 

Read the full report

More on our States and Regions Alliance


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