SANEI: Ongoing Studies

The Potential Role of the Clean Development Mechanism to Improve Energy Efficiency in South Asia

Many environmental programs have financial costs, but no financial benefits. Often this acts as a barrier that prevents the government from implementing environmental improvements. Energy efficiency, on the other hand, has both environmental benefit and positive financial return. For instance, improving energy efficiency of a system has multiple advantages, viz., efficiency of utilisation of natural resources, reducing air pollution levels, and lower spending by the consumer on energy expenditure. Hence, even from a financial perspective, energy efficiency programs are attractive investments. Similarly renewable energy technologies (RETs) reduce the dependence on other countries while at the same time are environmentally sound. Thus, energy efficient and renewable energy technologies (EERTs) can reduce both economic and environmental costs associated with energy supply and consumption. Despite these significant benefits the government and the utilities are not integrating these programmes into their planning process. As a result, the country is missing out on opportunities to save both in terms of energy and the environment. We propose to assess the EERTs (under the Clean Development Mechanism (CDM)) and their implementation based on three criteria: (i) awareness: propagating the economic and environmental incentives to the consumer, the government and the society, (ii) capital constraints: how readily available is the funding; and (iii) institutional mechanism: the difficulties in the process of implementation? To achieve this, we develop a methodological framework for individual technological options and estimate energy savings, the rate of return for the consumer and the benefit to the society in terms of reducing emissions. An outreach program will be also designed to emphasize the importance of environmental governance through information dissemination.

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