Keywords: India, carbon dioxide reduction, energy-, efficient motors, Global Environmental Facility, GEF, incremental costs, energy efficiency, Framework on Climate Change Convention, carbon dioxide emissions
Promoting faster diffusion of energy efficiency with Type 1 projects
The Framework on Climate Change Convention provides for incremental costs for those measures that help developing countries to reduce carbon dioxide emissions. The Global Environmental Facility (GEF) was set up to fund projects to provide incremental costs. Some argue that this means that fossil-fuel efficient technologies should not be included because they are economic on their own right and there is no 'incrementality' about them. This paper argues that even if they are 'economic', it is desirable to set up programmes for faster diffusion to achieve better results. An illustrative example of the promotion of energy-efficient motors (EEM) in the high tension industry sector in Maharashtra State in India is presented. In the cost-sharing programme case, 50% of the incremental cost difference of the EEM is borne by the GEF. A programme results in additional adoption of 203 000 motors and a net saving of 1.6 million tonnes of carbon, reducing the overall cost to $16 per tonne of carbon. The GEF would find it worthwhile to promote Type 1 projects that could lead to reduction of carbon dioxide emission.