Energy efficiency key to keeping the door open to 2 degrees C

Despite the availability of the technology and the energy cost savings possible, energy efficiency remains an area of enormous untapped potential. The report calls for an urgent need to increase investment in energy efficiency and ensure sufficient levels of funding are directed towards creating a supportive environment to mobilise this capital investment.

17 November 2016

  • Urgent need for a large increase in finance and a change in direction for investment in energy efficiency to help meet the ambitions of the Paris Agreement

  • Report highlights common barriers faced by energy efficiency financing programmes worldwide

  • Findings demonstrate the need for much more technical assistance and policy support to address key barriers to effective implementation

 

Investment to create demand for energy efficiency and reduce project risks in emerging economies will be critical to mobilising the scale of energy efficiency capital required to meet climate change targets, says a new report launched by the Carbon Trust at an event held at the UN Climate Change Conference (COP22) in Marrakech.  Despite the availability of the technology and the energy cost savings possible, energy efficiency remains an area of enormous untapped potential. The report calls for an urgent need to increase investment in energy efficiency and ensure sufficient levels of funding are directed towards creating a supportive environment to mobilise this capital investment.

The IEA estimates that to achieve a 2°C scenario, energy efficiency must account for 38% of total cumulative emissions reductions to 2050 (compared to 32% projected for renewables) and require global spending on energy efficiency to reach $550 billion a year by the 2030s. In 2015, multi-lateral development banks (MDBs) committed just $2.9 billion to energy efficiency programmes[1]. This investment was less than half the amount invested in renewables, at just 14% of their climate change mitigation investments.

 

Report author Simon Retallack, Director at the Carbon Trust commented:

“The most cost effective way of tackling climate change is through energy efficiency. Yet too little is being invested in it and the programmes that are being funded are frequently not having the impact they should. Public funding from multi-lateral developments and governments has a critical role to play, but there needs to be a change in approach. To succeed with energy efficiency, more needs to be invested in getting the right policies in place to drive change and in providing the technical support companies and households need to deploy energy efficient technology at scale. Making capital available for investment is not enough. Demand for it needs to be stimulated and a pipeline of projects created.” 

The report outlines three recommendations which the Carbon Trust believes are critical to help get energy efficiency deployed at scale, based on a comprehensive review of ten energy efficiency financing programmes from across the world:

  • Stronger government policy to increase the attractiveness of investment

  • Increasing the awareness of opportunities and providing technical assistance can create a pipeline of projects for investment

  • Building local skills and trust are key to building momentum and creating a self-sustaining market

 

Download the full report

 [1] 2015 Joint Report on Multilateral Development Banks' Climate Finance.

 

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About the Carbon Trust

The Carbon Trust is an independent, expert partner of leading organisations around the world, helping them contribute to and benefit from a more sustainable future.

  • We advise businesses, governments and the public sector on their opportunities in a sustainable, low carbon world.

  • We measure and certify the environmental footprint of organisations, supply chains and products.

  • We develop and deploy low carbon technologies and solutions, from energy efficiency to renewable power.

We have about 170 staff of 30 different nationalities, based in the UK, China, Mexico, Brazil, South Africa and the USA. The Carbon Trust’s experts come from a wide range of professional backgrounds, including engineering, business, policy and academia.