Trends in Efficiency Markets and Forces that Shape Them Marina Ploutakhina UNIDO

Introduction Rapid growth in energy demand Low energy efficiency (global - 37 %) Economic opportunities (espec. for developing countries and EIT) High potential for energy savings = Significant energy efficiency market Driving forces for energy efficiency market?

Energy Demand by Region

(Source: EIA/DOE, 1993; 1996; UN, 1994) Energy, GDP & Population Trends

OECD & Non-OECD Energy Intensities ( ) (Source: EIA/DOE, 1993; 1996; UN, 1994)

Economic & Environmental Incentives Provide significant opportunities and scope for the deployment of energy efficiency technologies in developing countries Provide an opportunity to consider a new GHG emissions control strategy - EFFICIENCY

Capital Requirements for the Energy Sector Developing countries will require investments over $100 billion per year for the next thirty years to meet electricity demand Only US$12 billion is available from external sources

Capital Requirements for the Energy Sector (cont’d) (Source: IIEC, 1991)

Emissions Changes from 1995 to Kyoto Target (Mtc)

The CDM Market OECD: Mtc in 2010 in excess of the reduction target Hot Air supply: Mtc Reductions needed to meet the target : Mtc

CDM Market Estimates (from various studies)

Money Matters The ODA flow to developing countries is US$50 billion per year A CDM of US$10 billion comprises the addition of 20% The FDI flows are around US$240 bn and in this context the CDM is only 4%

Conclusion: A Question How energy efficiency can become a strategy for GHG emissions reduction and control and how such a strategy can be deployed by developing countries and economies in transition to enable their participation in CDM and JI?