Energy service company and financial market development: experiences of the Global Environment Facility

Energy Service Companies (ESCOs) and the energy market for ESCO financing have been developing since 1976 when oil prices increased dramatically. ESCOs’ services cover projects in many energy areas, including energy extraction, power generation, energy conversion, transportation, power transmission, energy consumption, project financing, energy project audits, monitoring, and energy savings verification. In developing countries, there are many barriers in the energy market that are preventing ESCOs from developing. These barriers include lack of appropriate policy, financial mechanisms, and local capacities for ESCO development and management. Over the past 20 years, the Global Environment Facility (GEF) financed 39 ESCO projects in 25 countries and regions to remove these barriers. The results of these projects show that some countries, such as China, are very successful in ESCO development, but others are not. Different models of ESCOs in different financial markets in various countries are analyzed; and case studies are undertaken for China, India, Ukraine, and Brazil. This article concludes that, while developing financial markets for ESCOs, countries need to consider (1) initiating national government policy to stop energy subsidies and to reform energy pricing, (2) establishing a real, market based financial mechanism for ESCOs, (3) involving the private sector in project co-financing, (4) creating incentives to ESCOs in the market by investing part of government revenue from energy tax, and (5) incentivizing ESCOs by government corporate tax exemption.     

Towards an efficient and low carbon economy post-2012: opportunities and barriers for foreign companies in the Russian energy market

Russia is one of the most energy- and carbon-intensive countries in the world. The high level of technical abrasion and a low level of investments into modernization of the Russian energy industry cause huge energy wastage and carbon emissions. This situation is regarded by countries relying on energy imports from Russia as an increasing threat to security of supply and as a major barrier to global climate change policy. This paper provides an overview of the current and future Russian energy efficiency and greenhouse gas mitigation policies. The focus is laid on the detailed investigation of the progress and future potential of the market-oriented mechanisms Joint Implementation (JI) and Green Investment Scheme (GIS), being considered as two possible channels for FDI in transnational energy efficiency and carbon mitigation projects. The analysis was conducted by reviewing the relevant scientific and non-scientific literature including a variety of theoretical and practice-oriented arguments. Based on this assessment, we conclude that JI and GIS are confronted with numerous barriers in the Russian energy market. We further scrutinize the ability of Energy Service Companies (ESCOs), as one of the market intermediary models, to overcome some of these barriers in the process of effectively integrating JI and GIS in their long-term business strategies. Due to the compatibility of the main features of JI and GIS with the working procedures under the ESCO model we conclude that numerous synergy effects can be generated and that the majority of transaction barriers specific for the Russian energy market can be overcome. Such an integrative framework for international energy efficiency and carbon mitigation projects would contribute to the modernization of the Russian energy industry and enable a “win-win” situation for foreign companies seeking to invest in a sustainable manner.     

可再生能源的国外发展经验与我国的发展选择

世界经济飞速发展进程中,各国普遍面临着能源瓶颈.石油、煤炭等不可再生能源在人类消费的能源结构中占比逐渐降低是一种趋势,各国将关注点放在可再生能源方面,才是谋求经济可持续发展的理性选择.太阳能、风能、潮汐能、地热能、水能、生物质能、核能等可再生能源正在进入发展的快车道.中国、印度等发展中国家在可再生能源的开发方面处在世界前列,很多发达国家也开始转向可再生能源开发.可再生能源相对于传统能源而言,开发成本较高,所以政府需要给予支持政策.发达国家的经验表明,实行配额制是比较可行的,除此之外,还可以进行绿色交易、创新融资机制以及进行财政倾斜等相关制度设计,确保可再生能源得到可持续发展.     

Promoting energy efficiency financing and ESCOs in developing countries: experiences from Korean ESCO business

Promotion of ESCO business is one way of increasing energy efficiency. However, it has a lot of barriers and challenges to be successful. The Korean case is a good example to show the reason why economically viable energy savings measures cannot be implemented and how this can be corrected. Although financing is essential for promoting energy efficiency investment and ESCO business, it is not the most crucial barrier to overcome. Along with a financial barrier, an institutional barrier should also be lifted for energy efficiency investment. In this regard, the role of government as a market creator as well as a rule setter through removing barriers and mobilizing necessary capital needs to be emphasized.     

Recent experiences and challenges in promoting cleaner production investments in developing countries

The paper presents on the experience of the first year of implementation of the UNEP project ‘Strategies and mechanisms for promoting cleaner production (CP) investments in developing countries’. An insight into the experience gained in two developing countries, Guatemala and Zimbabwe is given in separate cases.The paper attempts a preliminary—by no means exhaustive—analysis of the current status of CP awareness among the financial community in selected developing countries and the main barriers to funding CP from a financial sector perspective. The experience gained in five developing countries allows to better investigate the ways whereby the financial community could, and perhaps should, more effectively promote financing of CP, thus contributing to the spread of the CP concept and measures at the macro (government), medium (industry associations, chambers of commerce) and micro (enterprises) levels. In doing so, the paper indirectly emphasises the role of other key stakeholders.Suggestions and recommendations expressed in the paper have to be taken clearly with a pinch of salt, as each country in the developing world has its distinct economic, political, social and cultural features.     

Capital assets and institutional constraints to implementation of greenhouse gas mitigation options in agriculture

Agriculture is one of the major sources of greenhouse gas (GHG) emission. It accounts for approximately 15% of the total global anthropogenic emissions of GHGs. Emissions could be twice as much if indirect emissions are also taken into the consideration. However, unlike other high emitting sectors such as transport or energy, agriculture is potentially a significant carbon “sink”. It has high technical potential as a carbon sink and if tapped, can substantially enhance global sequestration efforts. The technical potential, however, may not translate into actual GHG reduction because of the capital assets and institutional constraints faced by the smallholder farmers in the developing countries. In this paper we develop a capital assets based framework of physical, financial, social, human and natural barriers to agricultural carbon mitigation initiatives and through analysis of current initiatives, we set out policy based options to reduce each of these barriers. Fundamentally, barrier removal will entail designing agricultural carbon mitigation initiatives in collaboration with farmer communities, through strengthening local institutions, understanding land tenure and natural resource cultures, ensuring legitimacy and equity in payments and fast tracking training and information. We provide a framework that simultaneously aids the dual objectives of alleviating poverty in the poor farming communities of developing countries and lowering global greenhouse gas emissions.     

Rural energy transitions in developing countries: a case of the Uttam Urja initiative in India

In most developing countries, at the household level, traditional burning of biomass or use of inefficient technologies for domestic applications like lighting is common, triggering concerns related to fuel or technology switching. The paper focuses on opportunities to promote cleaner energy options through development of value chains delivering improved energy efficiency and access in developing countries. We discuss the example of Uttam Urja, a field project involving the dissemination of photovoltaic lighting technologies in rural areas of India. We focus on the challenges of introducing radical innovations into the residential energy sector in developing countries. For the purpose of this paper the Uttam Urja project is conceptualized as an ‘experiment’ and analysed using the Strategic Niche Management (SNM) framework. The paper emphasizes that to effect socio-technical transitions to clean energy options on the ground, it is desirable to focus on technology customization and innovative financing to cater to the needs and concerns of end users.     

Regulatory and Mixed Policy Options for Reducing Energy Use and Carbon Emissions

This article discusses non-fiscal policy options to reduce energy demand and the resulting environmental impacts, and it reviews experiences with these options to date. Such policies include accelerating technology development and demonstration, stimulating product demand via procurement policies, applying efficiency standards to information-poor end-use sectors, and encouraging utility energy-efficiency programs. Efforts to implement such measures are underway in several industrialised countries and have begun in developing countries. Increasing energy efficiency is an important area for near-term carbon emission reductions, and a key strategy for cost-effective mitigation of global climate change. However, little of the energy-efficiency potential identified by technical studies will be realised in the absence of policies to reduce barriers to energy-efficiency investments. Performance standards can overcome the lack of information on the part of energy users, while technology procurement helps overcome the view of manufacturers that introducing efficient products is risky. The effects of these policy options on product markets are characterised, showing the synergy between different instruments and their potential to create and transform markets for energy-efficient products, systems and services. The existence of such energy-efficiency markets can stimulate new progress and innovation, providing the conditions in which the continuous process of technical improvement is significantly accelerated. Most policy analysis and discussions regarding climate-change mitigation have centred on various forms of carbon emission taxes and to some extent on tradable emission offsets or permits. This article concludes with an examination of why non-fiscal options are mostly absent from energy-economic models and climate-change policy studies, and we suggest approaches to include them more fully in energy-policy analysis and implementation.     

Comparison between EMINENT and other energy technology assessment tools

Currently, issues related with climate change, security of energy supply, energy efficiency and sustainability are at the core of all energy policies and strategies. The current technologies are not able to face this challenge; therefore, the development of new and more sustainable energy technologies must be supported.As part of this, energy technology assessment tools can help decision-makers in the identification and evaluation of sustainable energy solutions, in order to integrate them in long term energy strategies.The EMINENT tool was developed to assess the performance and market potential of early stage technologies (EST) in a pre-defined energy chain, under national conditions, in terms of financial, energy and environmental criteria.This paper presents a comparative study between EMINENT and other tools for energy technology assessment. The tools analysed were CO2DB, MARKAL, IKARUS and E3Database.Although there are many different energy technology assessment tools, EMINENT seems to be the only one targeting EST.     

The elephant in the room – A comparative study of uncertainties in carbon offsets

The clean development mechanism (CDM) is a flexible mechanism under the Kyoto Protocol, which makes it possible for developed countries to offset their emissions of greenhouse gases through investing in climate change mitigation projects in developing countries. When the mitigation benefit of a CDM project is quantified, measurable uncertainties arise that can be minimised using established statistical methods. In addition, some unmeasurable uncertainties arise, such as the rebound effect of demand-side energy efficiency projects. Many project types related to land use, land-use change and forestry (LULUCF) have been excluded from the CDM in part because of the high degree of statistical uncertainty in measurements of the carbon sink and risk of non-permanence. However, recent discussions within the United Nations Framework Convention on Climate Change (UNFCCC) have opened up for the possibility of including more LULUCF activities in the future. In the light of this discussion, we highlight different aspects of uncertainties in LULUCF projects (e.g. the risk of non-permanence and the size of the carbon sink) in relation to other CDM project categories such as renewables and demand-side energy efficiency. We quantify the uncertainties, compare the magnitudes of the uncertainties in different project categories and conclude that uncertainties could be just as significant in CDM project categories such as renewables as in LULUCF projects. The CDM is a useful way of including and engaging developing countries in climate change mitigation and could be a good source of financial support for LULUCF mitigation activities. Given their enormous mitigation potential, we argue that additional LULUCF activities should be included in the CDM and other future climate policy instruments. Furthermore, we note that Nationally Appropriate Mitigation Actions (NAMAs) are currently being submitted to the UNFCCC by developing countries. Unfortunately, the under-representation of LULUCF in comparison to its potential is evident in the NAMAs submitted so far, just as it has been in the CDM. Capacity building under the CDM may influence NAMAs and there is a risk of transferring the view on uncertainties to NAMAs.     

Overcoming barriers to the implementation of alternative fuels for road transport in Europe

The success of implementing alternative fuels for road transport depends on their cost, performance and reliability. This paper focuses on the use of natural gas and LPG, hydrogen and biofuels in Europe. A brief presentation is given of their technical development status, their market potential, and barriers to their implementation in various market segments. Some market barriers are common to many new technologies, and can be overcome through adequate policy measures at European level. Generally, a combination of policies is required, and a number of supporting measures increase their effectiveness. The following policies affecting energy use in transport are discussed: market incentives, policies targeting technology and vehicle efficiency, and overall system improvement.     

国际贸易“碳中和”研究热点领域及其动向

碳中和是世界各国面临的共同问题。经济全球化与贸易自由化背景下国际贸易总量快速增长,伴随着深度国际分工与产业转移,贸易产品的生产者与消费者在陆表形成严重的空间位移。利用文献计量软件CiteSpace分析国际贸易主题下碳中和相关文献,揭示国际贸易“碳中和”研究动向。研究发现：（1）温室气体在全球范围时空演变,使跨区域、多尺度的全球碳治理变得更加复杂,发达国家将高污染与低价值链产业转移至各发展中国家,以生产者责任划分的碳核算原则不再适用于国际贸易合作。（2）进出口贸易逐渐成为新兴经济体经济发展动力,全球碳治理应转向新兴经济体与区域一体化,全球气候政策设计应遵守国际碳市场公平性底线,不断优化碳排放量核算体系,完善碳会计方法,模拟全球碳减排预期效果。重点提高产业部门碳减排意识和产业清洁技术及能源利用效率,利用多种手段改变生态系统的增汇减碳能力。新兴经济体在承接发达国家技术援助同时,应重点关注本国能源产业,发展可再生能源产业,提高能源的利用效率,并运用经济政策与金融工具促进本国的气候变化投融资产业发展。全球碳治理应更加注重公平性与国家间的经济发展、环境资源差异,利用多样的碳治理工具与协商合作方式,促使更多国家参与全球化或区域一体化的碳治理模式。（3）中国亟待通过国内多产业、多部门的增汇减排与国际碳减排、碳中和实践,健全碳市场机制,提高碳治理水平,为国际碳治理合作提供“最大公约数”。     

Reducing emissions from deforestation and forest degradation plus (REDD+) in the Philippines: will it make a difference in financing forest development?

There is a high level of interest in reducing emissions from deforestation and forest degradation plus (REDD+) carbon (C) financing as a way to accelerate forest conservation and development. However, there is very limited information on the potential costs and benefits of REDD+ in developing countries like the Philippines. In this paper, we estimated the range of likely financial benefits of REDD+ implementation in the country under various forest degradation and mitigation scenarios. Our findings show that reducing the rate of forest degradation by a modest 5 to 15 % annually while increasing the doubling the rate of reforestation to 1.5 % annually could reduce C emissions by up to about 60 million t C by 2030. These are equivalent to US$ 97 to 417 million of mean C credits annually at US$ 5 per ton C. These figures are much higher than the total budget of the government and official development assistance for forestry activities in the country which amounted to US$ 46 million in 2005 and US$ 12 million in 2006, respectively. We conclude that REDD+ C credits could be a significant source of financing for forestry projects in developing countries like the Philippines.     

中国风力发电公司融资模式探讨

在中国目前积极鼓励发展可再生能源产业前提下,风力发电产业面临着重大的发展机遇,风电产业发展对资金需求迫切。本文对中国目前风力发电公司的融资现实情况进行了分析,提出了风力发电公司应逐步改变目前主要依靠商业金融机构贷款这种融资方式,重点实施向政策性金融机构融资,通过上市等资本手段融资本,吸收私募股权投资,并运用CDM进行融资,实现融资渠道的多样化,降低融资成本,实现风力发电公司的利益最大化。     

Role of Bio-Energy Plantations for Carbon-Dioxide Mitigation with Special Reference to India

Fuelwood plays an important role in the rural economy of the developing countries of Asia and Africa. Optimizing energy fixation in forest trees through high density energy plantations (HDEP), gasification of wood, and conversion of forest tree biomass, are some of the potential areas whereby additional research and development input for efficient management of atmospheric carbon in our energy system can be incorporated. For example, the photosynthetic efficiency of forest trees is rarely above 0.5%, which on the basis of theoretical considerations can be increased by up to 6.6%. Thus there is an ample scope to improve the efficiency up to 1%, which amounts to doubling of the productivity of the forests. Recent policy changes and experiences with wood-based bio-energy programmes in several countries indicate that woodfuels may become increasingly attractive as industrial energy sources. Use of biodiesel and the formulation of a project for undertaking 13.4 million ha of Jatropha plantations in India highlight the seriousness with which the Government of India is promoting carbon neutral energy plantations. The cost of establishment of plantations primarily for fuel production and its conversion to energy are major deterrents in this pursuit. Some of the issues in developing countries, like low productivity on marginal lands, degraded forest lands, and unorganized units for biomass energy conversion, result in cost escalation as compared to other energy sources. This paper revisits the scope for raising energy plantations, a comparison of the direct and indirect mitigation potential uses of plantations as an adaptation strategy through reforestation and afforestation projects for climate change mitigation and socio-economic issues to make this venture feasible in developing countries.     

Supporting greenhouse gas mitigation in developing cities: a synthesis of financial instruments

One of the major concerns with the post-2012 global climate regime is to reach consensus on how to finance actions needed in fast-growing developing economies for significant greenhouses gases emissions mitigation. International financial and technology transfer are bound to bridge the gap under well-designed institutional framework to facilitate the transition to low(er) carbon development trajectories in developing countries. So far, cities, which contribute nearly 80% of global emissions, have not yet been recognised as a legitimate entity to implement different greenhouse gas mitigation policies and measures with relevant technical and financial abilities. Here we discuss the scope and scale of different climate-relevant financial mechanisms and describe their comparative advantages and weakness in financing climate resilient urban infrastructures (buildings and transport in particular). We show the limitations of current instruments available in scaling up necessary financial flows into developing cities to achieve the long term climate stabilisation targets. Lastly, the paper examines the feasibility of factoring the sector-wise and Nationally Appropriate Mitigation Actions (NAMA) mechanisms into local authorities’ long-term mitigation strategy by raising necessary funds to facilitate shifting the business as usual trajectories in developing cities in the next decades.     

Assessing the uptake of small-scale photovoltaic electricity production in Argentina: the PERMER project

Supplying electricity to remote rural communities in lesser developed countries (LDCs) is key to improving livelihoods and reducing poverty. Decentralised renewable energy systems such as solar photovoltaic (PV) electricity have the potential to provide a viable and sustainable alternative to overcome the physical and economic barriers facing the expansion of low and medium tension grids. This paper critically assesses the impact of small-scale PV systems installed in homes, schools and public buildings over the last six years under the PERMER project—Renewable Energy Project for the Rural Electricity Market—co-funded by a range of public and private sources. The structure of financial subsidies has enabled these remote rural communities to receive an electricity supply that, in many cases, would otherwise not have been possible. Replacing traditional energy sources such as candles and kerosene lamps, the PV electricity systems are providing better quality light, reducing indoor air pollution levels, as well as a means to power communications technologies and extend hours for cultural and productive activities. There are, however, certain technical, organisational and intellectual barriers that remain to be overcome before the project can be considered to be operating optimally.     

村镇污水治理的市场化理论与模式

村镇污水治理属于农村环境保护的基础设施建设,需要巨额资金的投入,单靠政府财政补助很难进行。因此,建立村镇污水治理市场,引入投融资机制,就成为政府的必然选择。运用新公共管理理论,把村镇污水治理分为供给与生产两个过程,政府通过公共决策和监管保障供给,生产则实行市场化,以解决村镇污水治理的资金来源,提升运营和资金使用效率。结合中国的具体实际,探讨了适宜于中国村镇污水治理的供排水一体化、管理合同和DBO三种市场化模式。     

Integrating mitigation and adaptation into climate and development policy: three research questions

The potential for developing synergies between climate change mitigation and adaptation has become a recent focus of both climate research and policy. Presumably the interest in synergies springs from the appeal of creating win–win situations by implementing a single climate policy option. However, institutional complexity, insufficient opportunities and uncertainty surrounding their efficiency and effectiveness present major challenges to the widespread development of synergies. There are also increasing calls for research to define the optimal mix of mitigation and adaptation. These calls are based on the misguided assumption that there is one single optimal mix of adaptation and mitigation options for all possible scenarios of climate and socio-economic change, notwithstanding uncertainty and irrespective of the diversity of values and preferences in society. In the face of current uncertainty, research is needed to provide guidance on how to develop a socially and economically justifiable mix of mitigation, adaptation and development policy, as well as on which elements would be part of such a mix. Moreover, research is needed to establish the conditions under which the process of mainstreaming can be most effective. Rather than actually developing and implementing specific mitigation and adaptation options, the objective of climate policy should be to facilitate such development and implementation as part of sectoral policies. Finally, analysis needs to focus on the optimal use and expected effectiveness of financial instruments, taking into account the mutual effects between these instruments on the one hand, and national and international sectoral investments and official development assistance on the other.     

节能环保产业发展现状剖析对中国的启示与研究

随着全球经济的飞速发展,经济受资源和环境约束的矛盾接近临界。而人们对环境质量的需求不断上升,在此大背景下,节能环保产业应运而生。在介绍国际节能环保产业和分析中国节能环保产业现状的基础上,分析融资渠道不够畅通,市场活力有待激发,资本市场亟待完善,产业创业还需推进等一系列制约中国节能环保产业发展的问题,并从理清管理体制,畅通融资渠道,健全资本市场,推进产业创业等方面给出了建议。