Energy efficiency

Visualization of Energy Investment web page published – based on analysis in Nature Energy journal

CD-LINKS has created a visualization web page that was developed based on an analysis published in the journal Nature Energy, which showed that low carbon investments will need to markedly increase if the world is to achieve the Paris Agreement aim of keeping global warming well below 2°C.

The authors of the analysis find that a fundamental transformation of the global energy system can be achieved with a comparatively modest increase in overall investments. However, a radical shift of investments away from fossil fuels and toward renewables and energy efficiency is needed, including dedicated investments into measures to achieve the United Nations’ Sustainable Development Goals (SDGs).

As part of the Paris Agreement in 2015, many countries defined Nationally Determined Contributions (NDCs) designed to reduce their greenhouse gas emissions. The study confirms that current incentives like the NDCs will not provide sufficient impetus for the “pronounced change” in investment portfolios that are needed to transform the energy system.

To keep global temperature rise to 1.5–2°C, investments in low carbon energy and energy efficiency will likely need to overtake investments in fossil fuels as early as 2025 and then grow far higher. The low carbon and energy efficiency “investment gaps” calculated by the researchers are striking. To meet countries’ NDCs, an additional US$130 billion of investment will be needed by 2030, while to achieve the 2°C target the gap is US$320 billion and for 1.5°C it is US$480 billion. These investment figures represent more than a quarter of total energy investments foreseen in the baseline scenario, and up to half in some economies such as China and India.

Key insights of the analysis have been visualized in a user-friendly way with the CD-LINKS Energy Investment Visualization page, the development of which was led by Valentina Bosetti and Laurent Drouet of the Euro-Mediterranean Center on Climate Change (CMCC).

More detailed information on this story is available from the IIASA news webpage.

Assessing China’s Green Lights Program

For the past 20 years a programme of the Chinese government has been aimed at reducing electricity consumption and facilitating the provision of efficient lighting to consumers, thereby reducing pollution and potentially the demand for new power plants. This programme – the ‘Green Lights Program’ was established in 1996 to promote energy efficiency in lighting due to expected increased demand to the electricity system. Scientists working on the CD-LINKS project have recently published a paper that assessed the impacts of the program and how successful it was, the full paper is available from here and was featured as a Research Highlight in Nature Energy’s journal available from here.

The Green Lights Program resulted in not only environmental benefits but also economic benefits to China and was assessed in the paper by a set of indicators, including electricity savings, consumer savings, production capacity expansion, and export income.

Lead author of the paper, Fei Guo from International Institute for Applied Systems Analysis (IIASA), says: “A unique feature of China’s Green Lights Program that contributed to its considerable success was the strong alignment of energy efficiency and industrial development objectives. This resulted in the policy achieving benefits for people’s pockets, the economy and the environment. This aspect of the policy might provide useful lessons for other developing countries.”

The programme prioritized policy focuses in stages: 1) Stage I (1996–1998) focused on raising the awareness of the general public on ‘high-efficiency lighting products’; 2) Stage II (1999–2006) aimed to promote and regulate the quality of domestic lighting products; 3) Stage III (2007–2010) targeted expediting the diffusion of compact fluorescent lamps (CFLs) by means of financial and mandatory incentives; and 4) Stage IV (after 2010) started to shift the previous program priority from CFLs to emerging light-emitting diode (LED) lighting technologies.

The success of the program can be attributed to five key factors:

Strong and sustained government commitment
Prioritised policy focus by: raising awareness, enforcement of manufacturers to improve product quality, subsidy programmes by the Chinese government and the utilisation of new technologies
Extensive efforts on product quality control
Successful combination of energy efficiency policies with industrial development policies
Combination of distinct and varying incentives

The program helped shape the interdependence of energy efficiency policies with industrial policies. In its conclusions the paper notes that several challenges are evident that the programme needs to address in its next phase. These findings might be of interest to other developing countries who can learn from the experience obtained by the Chinese government in the implementation of its Green Lights Program.