Energy Efficiency Policies around the World: Review and Evaluation

1.2 Why is energy efficiency an important issue?

The Kyoto Protocol objectives and more recently, emerging constraints on energy supply have raised the importance given to energy efficiency policies. Almost all OECD countries and an increasing number of non-OECD countries are using new or updated instruments adapted to national circumstances. Apart from a major role of market instruments (voluntary agreements, labels, information dissemination etc), regulatory measures are also widely implemented where the market fails to give the right signals (buildings, appliances etc).

In developing countries, energy efficiency is an important issue, too but often with different driving forces compared to industrialised countries. In developing countries, the need to reduce greenhouse gas emissions and local pollution is less of a priority: alleviating the financial burden of oil imports, reducing energy investment requirement, and making the best use of existing supply capacities to improve the access to energy are more important drivers.

Following the steep increase in oil price since 2003³  , the cost of oil imports has soared, with severe consequences for economic growth of the poorest countries. Any efficiency improvement in oil consuming sectors will result in direct benefits to the balance of trade of oil importing countries.

Improving energy efficiency, for instance in electricity use, will have two benefits:

• Supply more consumers with the same electricity production capacity, which is often the main constraint in many countries of Africa and Asia.
• Slow down the electricity demand growth, and reduce the investment needed for the expansion of the electricity sector; this is especially important in countries with high growth of the electricity demand, such as China and many South East Asian countries.

The focus of this report is on the evaluation of energy efficiency policies and trends.  What is meant by "energy efficiency"?

3. Almost a tripling between the beginning of 2003 (26 US$/bbl for the Brent) and August 2006 (73 US$/bbl); since then the price is around 60 US$/bbl, which still twice higher than in 2003.