There are two important new reports that EiD wants to bring to your attention.
• Energy efficiency as infrastructure: leaping the investment gap
This is an important briefing paper by Ada Ámon and Ingrid Holmes for E3G.
As Europe moves to implement the Paris Climate Agreement, two-thirds of its low carbon energy infrastructure investment to 2040 will need to be in energy efficiency. This implies an eightfold increase in current levels of investment.
The Energy Union Strategy has called for a fundamental rethinking of energy efficiency, to treat it as an energy source in its own right, representing the value of energy saved. Without a major rethink Europe risks it ability to meet its climate and energy targets in 2030 and beyond.
This briefing argues that the investment gap exists because, politically, we have failed to properly grasp the nature of the challenge. Going forward, energy efficiency needs to be redefined as a core part of Europe’s energy infrastructure. This briefing outlines the arguments for this and the practical implications of moving forward with this proposal.
Delivering Energy Efficiency
An eightfold increase in current levels of energy efficiency investment is needed to 2040 to keep Europe on track to meet its Paris Agreement obligations.
The European Commission’s Heating and Cooling Strategy has started to set out the links between energy efficiency and the wider energy infrastructure system. But there needs to be more explicit integration. The first step is to define energy efficiency as an infrastructure priority. There are three core arguments for this:
- Functional: in a post-Paris Agreement world, around two-thirds of the investment needed to achieve 2°C in a cost-effective manner needs to be in efficiency, meaning energy efficiency investment is the most critical part of the energy transition.
- Logical: Treating energy efficiency as infrastructure and integrating it into wider national infrastructure planning means supply side investment needs will fall as projected demand falls, thus reducing the risk of asset stranding and reducing costs to society.
- Definitional: Energy efficiency fulfills the definition of infrastructure used by the International Monetary Fund and other economic institutions. Like traditionally recognized infrastructure, energy efficiency is long-lasting capital stock, provides inputs to a wide range of goods and services and frees up capacity elsewhere in the economy.
Treating energy efficiency as infrastructure would transform how the Commission and Member States approach the energy efficiency agenda in four ways:
- Energy efficiency projects would be subject to economic appraisals that highlight its benefits as well as costs: Treating energy efficiency as infrastructure would require it to be appraised in the same way as other social investments (such as road or school building programmes). Doing this will make visible the multiple benefits of energy efficiency – and the fact that a failure to deliver energy savings and demand response actually has a cost to society.
- There would be a strong case to review EUROSTAT accounting rules, allowing for adjustments in how energy efficiency investment is accounted: Two review options could be considered: (i) Consider a new off balance sheet classification of ‘productive debt’ (applies to Government-led investment programmes); (ii) Consider an amendment to how IFRS rules are interpreted and recognise cash savings from energy efficiency investment programmes and Energy Performance Contracts in the ‘scoring’ of investments (applies to government led investment, as an alternative to the above, and also to industry-led investment).
- There would be opportunities to create a better functioning internal energy market: To ensure the delivery of the best outcomes for consumers, energy markets need to be able to deploy the optimal amount of energy efficiency over time. This requires bespoke regulation of energy markets to drive the deployment of demand response and energy efficiency that create a “level playing field” where efficiency can compete equally with the supply side in energy markets (both the wholesale market but also in capacity markets and even auctions for low carbon capacity).
- A review of State Aid Treatment of energy efficiency would be triggered to facilitate streamling of public-private financing options: The constraints placed on aid intensities for energy efficiency (30-50%) measures are the lowest of all environmental aid measures; energy infrastructure on the other hand is allowed 100% of eligible costs. Revising State Aid treatment of energy efficiency to match the treatment of wider energy infrastructure will streamline the processes by which public-private financing structures are developed to support investment, which in turn will unleash the power of cities and regions to deliver efficiency and demand side measures.
The briefing paper is available here.
• GeSI Mobile Carbon Impact
In December the UK’s Carbon Trust published an important new report on how mobile communications technology is making a considerable contribution to action on climate change.
Mobile communications technology is making a considerable contribution to action on climate change according to the GeSI Mobile Carbon Impact report released by the Global e-Sustainability Initiative (GeSI), authored by the Carbon Trust.
The analysis finds that the use of mobile in the USA and Europe alone is already enabling a saving of more than 180 million tonnes of carbon emissions a year, an amount greater than the total annual emissions of the Netherlands. This abatement, or reduction impact, is approximately 5 times greater than the emissions emitted from the operation of the mobile networks.
The report is the first time that the actual impact mobile is having today has been quantified in detail. The Carbon Trust assessed 60 carbon saving mechanisms across ten categories. This involved examining a variety of uses of mobile communications technology, from the use of smartphones to machine-to-machine (M2M) connections.
The Carbon Trust’s analysis shows that the largest savings currently being made are in the operation of buildings and transportation, thanks to improvements in areas such as building management and route planning, which has reduced energy and fuel use. Mobile is also making a meaningful impact thanks to changes it has enabled in lifestyles and working patterns, as well as on energy infrastructure.
An international study of 4,000 smartphone users across the USA, UK, Spain, South Korea and Mexico was conducted for the report and found that many people are already using their smartphone in a way that helps cut their personal carbon emissions. Overall, respondents expressed high levels of willingness to adopt new behaviours that could result in even more substantial future reductions.
The past decade has seen an explosive growth in mobile. There are now more than 7 billion mobile connections in the world, up from just over 2 billion in 2005. And the technology is transforming how individuals and organisations behave, helping them to do things more productively or efficiently, at the same time as reducing overall environmental impact.
But some of the greatest future potential savings exist in other areas such as agriculture, where mobile communications can help with everything from promoting the use of sustainable farming techniques to using sensors to avoid the excessive application of fertiliser.
Mobile communications technology is also helping to unlock a number of the technological advances projected to have a significant future impact on sustainable development which do not exist at scale today, such as smart grids and driverless cars.
The report also projects that the abatement impact from mobile is set to increase by at least 3 times over next 5 years.
The report is available here.