The TERI-Canada Energy Efficiency Project was first conceptualized in 1995 and began implementation in 1997. With the commitment to a 3-year funding agreement by the CIDA (Canadian International Development Agency) in September 1999, the project set out to contribute to sound development in India, focusing on the energy sector. To achieve this goal, the project created a partnership between TERI, IISD (International Institute for Sustainable Development), PIAD (Pembina Institute for Appropriate Development), and AEI (Asian Energy Institute) to promote energy efficiency and conservation through education and the analysis of market-based as well as fiscal and regulatory approaches.

The kind of research on policy tools and measures undertaken in this project is important because public policy has the capacity to multiply the effect of a small change, through its impact on the decisions made by companies and consumers.

The design of the project also recognized the fact that national and international policies are interconnected. By establishing a project team at TERI, PIAD, IISD, and AEI, the project allowed for cross fertilization of ideas from domestic policies in both India (TERI) and Canada (IISD), and it also allowed for linkages to be made between domestic policy in Bangladesh, China, India, Indonesia (TERI and AEI), and Canada (IISD and PIAD) and evolving international policy and tools such as the CDM.

In order to successfully address such a broad jurisdictional scope, the project focused on three streams of research including:

CDM (Clean Development Mechanism) – to examine the potential application of the CDM in Asia and to identify GHG mitigation projects that could be potential candidates for CDM funding.

GBR (Green Budget Reform) – to identify budgetary instruments and develop analytical tools that examine the sustainability implications of energy sector development.

This research stream included four separate projects:
Annual green budget recommendations to the Government of India; A framework for energy sustainability assessment; Full-cost accounting of electricity generation; and the MARKAL equity andcompensation initiative studying the impacts of climate change mitigation scenarios on lower income groups and the design of compensation packages to minimize the adverse impacts on households.

PEERS (Programme on Energy Environment Resources and Sustainability) – to build leadership capacity in government, industry, media, NGOs and community-based organizations to promote sustainability goals in Asia.