What Are The Obstacles To Promoting Energy Efficiency

Often times, "energy efficiency" seems arrested in the demonstration project mode of operation.5 While three, four, and even ten demonstration projects contribute toward sustainable energy, institutional change is unlikely to take off at that level of activity. Furthermore, the perpetual demonstration mode of energy efficiency makes potential host country investors suspect that these approaches to energy management either cannot take root in economies in transition, or that they are flawed in some manner. While neither is the case, if these perceptions are to be overcome, it would be well to follow the maxim: "Nothing succeeds like success!"

To achieve large-scale sustainable energy and environmental outcomes within the economies in transition, advocates must scale-up their activities and find ways to attract the political and commercial interest of local political and commercial elites.

A second problem confronted by advocates of energy efficiency and renewable energy is the dominance of NGOs as recipients of funding in target countries. While part of the mainstream of Western civil society, NGOs are only now developing some influence in many of the transitional economies. This is not to suggest that NGOs have no role in promoting energy efficiency and renewable energy. Quite the contrary—NGOs are staffed by competent people and play important roles. Nevertheless, the NGO community does not have nearly the influence on the design and implementation of laws and regulations in the energy and environmental sectors in economies in transition as they do in the Western donor countries. They also lack access to sources of significant finance to fund the necessary scale-up.

To be successful, to develop and finance a pipeline of successful projects that drive policy change, institution building, and capacity building, advocates for sustainable energy must establish a new paradigm that captures the imagination of larger private sector resources and talents. Advocates must gain the attention of host country political and commercial elites on the business case that energy efficiency and renewable energy represent—high IRRs (Internal Rates of Return), technologies that work, and environmental improvements that can be monetized by trading environmental credits.

By demonstrating commercial success stories in a transparent way, insuring that these successes are replicable, and creating the policy and institutional changes that can promote replication, local elites can further develop sustainable energy projects for their own pecuniary interests. Good energy and environmental outcomes then become positive externalities from which the host countries and the world benefit.

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