three World Bank evaluations provide indirect support for the paradox and some
hopeful signs of where the paradox may be solved.
First and foremost, the evaluations identify energy efficiency as a crucial
pathway towards climate action that potentially funds itself.
5 Well guided efforts
toward energy efficiency tend to have economic returns that dwarf those of most
other development projects, while at the same time resulting in lower greenhouse
gas emissions. Especially the second evaluation (World Bank 2010, p. 32) identifies
several promising avenues: efficient lighting that offers very high economic returns
and significant emission reductions; reducing losses in the transmission and distribution of energy; large-scale efforts in energy efficiency may reduce the need for
power plants (World Bank 2010, p. xv). The 2010 evaluation was one of the first to
provide evaluative evidence that energy subsidies are “expensive, damage the
climate and benefit the rich” (World Bank 2010, p. 119).
These findings in the World Bank/IEG evaluations (most notably the second
evaluation) were further supported by evaluative evidence from the Asian Development Bank, the European Bank for Reconstruction and Development and the
GEF. In a briefing note the Evaluation Cooperation Group of the multilateral banks
noted strong evidence from independent evaluations that
6 :
• Energy efficiency investments are highly cost-effective;
• Fossil fuel subsidies discourage energy efficiency;
• The financial sector can be persuaded to provide energy efficiency loans;
• Genuine demonstration projects can transform markets;
• Biases against energy efficiency projects can be overcome.
However, presenting this evidence to the climate change negotiators could to
some extent be characterized as “preaching to the converted” and the evidence for
these points still needs to sway governments to reduce fossil fuel subsidies and
promote energy efficiency.
The Inter-American Development Bank’s 2014 evaluation of its climate change
strategy notes that the IDB has seen its largest contribution to greenhouse gas
emission reductions from its support for renewable energy investments (mainly
hydropower – IDB 2014, p. 34), rather than energy efficiency in which the Bank has
not been as active. The 2014 evaluation aligns the IDB with the earlier ECG
briefing note in suggesting that “improvements in energy efficiency have perhaps
the greatest potential impact in reducing GHG emissions at the lowest costs”, for
which energy subsidies “remain a key barrier” (IDB 2014, p. x). A second sector
that turned out to be highly relevant for climate change was transportation: bus
5 IEG [2016]. Four myths about climate change. Webtext accompanying the publication of the
three Climate Change and the World Bank Group reports. http://ieg.worldbankgroup.org/topic/
climate-change, accessed May 9 2016.
6 ECG (2011). Overcoming barriers to energy efficiency: new evidence from independent evaluation. S.l., Evaluation Cooperation Group. [Briefing note, November 23, 2011.] This note was
presented to the 17th Conference of the Parties (COP17) of the UN Framework Convention for
Climate Change, held from 28 November to 9 December 2011 in Durban, South Africa.
2 Action on Climate Change: What Does It Mean and Where Does It Lead To?
19
hopeful signs of where the paradox may be solved.
First and foremost, the evaluations identify energy efficiency as a crucial
pathway towards climate action that potentially funds itself.
5 Well guided efforts
toward energy efficiency tend to have economic returns that dwarf those of most
other development projects, while at the same time resulting in lower greenhouse
gas emissions. Especially the second evaluation (World Bank 2010, p. 32) identifies
several promising avenues: efficient lighting that offers very high economic returns
and significant emission reductions; reducing losses in the transmission and distribution of energy; large-scale efforts in energy efficiency may reduce the need for
power plants (World Bank 2010, p. xv). The 2010 evaluation was one of the first to
provide evaluative evidence that energy subsidies are “expensive, damage the
climate and benefit the rich” (World Bank 2010, p. 119).
These findings in the World Bank/IEG evaluations (most notably the second
evaluation) were further supported by evaluative evidence from the Asian Development Bank, the European Bank for Reconstruction and Development and the
GEF. In a briefing note the Evaluation Cooperation Group of the multilateral banks
noted strong evidence from independent evaluations that
6 :
• Energy efficiency investments are highly cost-effective;
• Fossil fuel subsidies discourage energy efficiency;
• The financial sector can be persuaded to provide energy efficiency loans;
• Genuine demonstration projects can transform markets;
• Biases against energy efficiency projects can be overcome.
However, presenting this evidence to the climate change negotiators could to
some extent be characterized as “preaching to the converted” and the evidence for
these points still needs to sway governments to reduce fossil fuel subsidies and
promote energy efficiency.
The Inter-American Development Bank’s 2014 evaluation of its climate change
strategy notes that the IDB has seen its largest contribution to greenhouse gas
emission reductions from its support for renewable energy investments (mainly
hydropower – IDB 2014, p. 34), rather than energy efficiency in which the Bank has
not been as active. The 2014 evaluation aligns the IDB with the earlier ECG
briefing note in suggesting that “improvements in energy efficiency have perhaps
the greatest potential impact in reducing GHG emissions at the lowest costs”, for
which energy subsidies “remain a key barrier” (IDB 2014, p. x). A second sector
that turned out to be highly relevant for climate change was transportation: bus
5 IEG [2016]. Four myths about climate change. Webtext accompanying the publication of the
three Climate Change and the World Bank Group reports. http://ieg.worldbankgroup.org/topic/
climate-change, accessed May 9 2016.
6 ECG (2011). Overcoming barriers to energy efficiency: new evidence from independent evaluation. S.l., Evaluation Cooperation Group. [Briefing note, November 23, 2011.] This note was
presented to the 17th Conference of the Parties (COP17) of the UN Framework Convention for
Climate Change, held from 28 November to 9 December 2011 in Durban, South Africa.
2 Action on Climate Change: What Does It Mean and Where Does It Lead To?
19