Energy Efficiency’s Contribution to Reducing World Poverty: The Role of the Regional Commissions

Marek BelkaExecutive Secretary

Economic Commission for Europe

Energy Efficiency’s Contribution to Reducing World Poverty: The Role of the Regional Commissions

Continued Economic Growth Will Further Contribute to Global Warming

Global Warming Will Have a Particularly Large Impact on Tropical Agriculture

As a Result, the World’s Poorest Bottom Billion Will Be Negatively Affected to a Significant Degree

Improved Energy Efficiency Can Significantly Reduce Energy Needs and CO2 Output

The Regional Commissions Can Make a Significant Contribution to Increasing Energy Efficiency

Global Trends in Energy Use1980-2006Between Now an 2045 Energy Use Likely to Double

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50

100

150

200

250

World Population World GDP PPP Constant 2005$World Energy Use BP Energy per GDP

AnnualGrowth3.2%

1.9%

1.5%

-1.3%

World Energy Sources Over 80% of energy is produced from CO2

producing fossil fuels, and without major policy or technological change this is unlikely to change in the next 25 years

Source:IMF

Effects of Global Warming on the Poorest “Bottom Billion”

The damages greatest for those closest to the equator and on the poor who are be less able to adapt with irrigation and increased use of fertilizers.

Sub-Saharan Africa is the region most vulnerable to climate change followed by south, southeast, and central Asia, and the Middle East.

Increased temperatures, and increased seasonal variability in rainfall are likely to cause agricultural yields of some crops to fall by 50% as soon as 2020.

Agricultural subsistence farmers, which are a majority in some LDCs, will be impacted the worst.

Conflicts over scarce water resources and increased poverty will increase intra and possibility inter-state conflicts; migration out of these regions will intensify.

The spread of numerous diseases will increase.

The Economic Losses from Global Warming Are Greater for the Tropics and the Poor

Derived from Nordhaus and Boyer 2000

Estimated GDP Loss from 2.5oC Increase in Global Temperature

The Tide of Global Growth Is Producing an Environmental Undertow on the Bottom Billion

GDP Growth

World Distribution of Income in Dollars per Day

CO2

Addressing Global Warming Has Four Pillars:

Alternatives to fossil fuels: biofuels, waste products, wind, solar, tidal, nuclear These are increasingly becoming cost effective

Switching to less CO2 intensive fossil fuels & carbon capture and sequestration Resource limits and experimental technology

Increased energy efficiency Many cheap, reliable, easy and efficient existing

options; many are self-financing Adaptation to climate change

Most difficult for the poorest Stern Report generally concluded that adaptation

was more expensive than mitigation

The Cross-Country Variation in Energy Efficiency Is Quite Large:

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0.6

0.8

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0 10000 20000 30000 40000 50000 60000 70000 80000

Per Capita Income PPP $ 2005

Kg

. o

f O

il E

qu

ivale

nt

per

$1 G

DP

Energy Savings If All Countries Reach at Least

the Average: 19.6%

Energy Savings If All Countries Reach the Energy

Efficient Frontier : 42%

Increasing Energy Efficiency (In Green) Is Not Only The Least Costly Way to Reduce CO2, but Often Has Actual Negative Costs

Adopted from Enkvist, Naucler, and Rosander

The Role of the ECE in Promoting Energy Efficiency

The market economies were twice as efficient as the transition economies in using energy

It was therefore recognized that this technology, expertise, and experience could be shared

An Energy Efficiency Program was established in 1991

Has provided technical co-operation and financing to 24 ECE countries

Projects financed in four countries during 1999-2005 are now reducing CO2 by the equivalent of 68,000 automobiles a year

The Basic Objectives of the ECE’s Energy Efficiency 21 Project:

Identify and Develop Investment Projects Technical assistance in preparing bankable project proposals

Policy Reform: Strengthen energy efficiency and renewable energy policies by assisting municipal and national authorities in introducing economic, institutional and regulatory reforms that support investment projects Broad Analysis of Policy Reforms and Case Studies Senior Decision Maker Seminars Policy Advisory Services

Financing Energy Efficient Investments: Promote opportunities for banks and commercial companies to invest in energy efficiency projects Creation of the €354 million SwissRe/Conning Investment Fund

for EU projects which, for example, financed a €35mil. wind farm in Germany & France

Energy Efficiency 21 Project for 2008-2012: Creation of an Investment Fund for 12 Former Transition Economies

$10.55 million for Technical Assistance from: $2 million UNF $2.5 million

MAE/French FEM

$3 million UNEP GEF

$250,000 European Business Congress

$ 400,000 / year UNECE In-Kind

$50,000 / year National In-Kind

$250 million Public-Private Equity Investment Fund

Will be used to create

Finance $2 Billion in Energy Efficient

Investment Projects

Which with co-financing will

Eliminate 5 Million Cars Worth (10 mil tons) of CO2 a Year

Regional Commission Co-operation in Promoting Energy Efficiency

The ECE has received a grant to help expand its Energy Efficient Financing Project to the other Regional Commissions

Together these could serve as regional hubs for a UN system of information and capacity building services for promoting energy efficiency in developing countries

A possible side event on energy efficiency in the different regions during the COP-14 in Poznan in December 2008

Summary: Promoting energy efficiency will contribute not only to the goal of sustainable development but will help avoid increased poverty for the poorest

THANK YOU

Presentation available at: www.un.org/regionalcommissions