Energy, Emissions and Economic Impacts of Appliance Efficiency Measure

As India moves towards meeting its Intended Nationally Determined Contributions (INDCs) to emissions reduction, policy makers have to choose among available alternatives. Investment in renewable energy continues to be the primary choice. Energy efficiency is relegated to the second place as savings are not obvious to track and its economy wide impacts are difficult to estimate. The debate on the choice between energy efficiency and renewable energy is far from settled and decisions continue to be made void of empirical evidence.

This paper is a work in progress. Here we estimate the reduction in energy consumption, emissions and economy wide impacts over time from promotion of efficient light bulbs in the Indian context. We then calculate the investment (and associated emissions) required to meet the equivalent energy demand through conventional and renewable sources if the energy efficiency measures were not deployed.

The impacts of these alternative policy scenarios are estimated using a coupled input-output econometric framework of the newly developed E3-India model. The model captures the relationship between Economy, Energy and Emissions, covering 20 economic sectors, 8 energy users and five income quintiles for India's 32 states and union territories. This method used here can be used to quantify the monetary and environmental impacts of efficiency improvement programs as compared to renewable energy options.