Page 20 - Energy Efficiency Policies in China and India - A Research Paper
P. 20
Energy efficiency policies in
China and India
Figure 5: Energy savings potential for iron and steel, based on
best available techniques (BAT)
Source: IEA ( 2013)
Although the benefits of energy efficiency investments are obvious, scaling up those
investments continues to pose challenges. Many barriers contribute to the limited uptake of
energy efficiency opportunities. These include information failure, split incentives, subsidized
pricing of energy, inadequate pricing of externalities, a shortage of financing, etc. For example,
energy efficiency investment opportunities attract less attention from investors in both the
private and government sectors when compared to opportunities to invest in new fossil
fuel resources such as shale gas and oil (IEA, 2015). Many energy efficiency measures have
difficulty attracting external financing as the returns they offer are small in scale or dispersed,
and therefore not as attractive to investors as capacity or market expansion (Taylor et al., 2008).
While market-based solutions do exist, an enabling policy framework is also needed to realise
the substantial energy and cost savings to be realised through efficiency measures.
This report discusses recent trends in energy efficiency in China and India, including an
analysis of the evolution of energy efficiency policies and the impact of those policies on
selected sectors, and outlines key challenges and policy recommendations on improving
energy efficiency.
Research Paper 05
China and India
Figure 5: Energy savings potential for iron and steel, based on
best available techniques (BAT)
Source: IEA ( 2013)
Although the benefits of energy efficiency investments are obvious, scaling up those
investments continues to pose challenges. Many barriers contribute to the limited uptake of
energy efficiency opportunities. These include information failure, split incentives, subsidized
pricing of energy, inadequate pricing of externalities, a shortage of financing, etc. For example,
energy efficiency investment opportunities attract less attention from investors in both the
private and government sectors when compared to opportunities to invest in new fossil
fuel resources such as shale gas and oil (IEA, 2015). Many energy efficiency measures have
difficulty attracting external financing as the returns they offer are small in scale or dispersed,
and therefore not as attractive to investors as capacity or market expansion (Taylor et al., 2008).
While market-based solutions do exist, an enabling policy framework is also needed to realise
the substantial energy and cost savings to be realised through efficiency measures.
This report discusses recent trends in energy efficiency in China and India, including an
analysis of the evolution of energy efficiency policies and the impact of those policies on
selected sectors, and outlines key challenges and policy recommendations on improving
energy efficiency.
Research Paper 05
