The Bali Action Plan provides the principal framework for a post-2012 climate agreement. It focuses on a shared vision for long-term cooperative action and for enhanced national and international action to mitigate climate change, on adaptation, on supporting technology development and transfer, and on the provision of financial resources and investment. The Copenhagen agreement could help provide the foundation for scaling up industrial energy efficiency to levels that reflect its share of the global mitigation potential. To that end, the following recommendations are made:
- Energy sector policy reform — including the removal of broad-based subsidies — is needed to ensure that market signals fully reflect the true cost of producing and consuming energy and stimulate investment in energy efficiency markets.
- National Energy Efficiency Action Plans should be developed that set ambitious, achievable national energy efficiency goals or targets for the industrial sector based on studies which document the full costs and benefits of adopting energy-efficient technologies, practices, and measures. Better public datasets and indicators should be developed on industrial energy efficiency and cost of improvement options. A database of existing successful and potential industrial energy efficiency policies and measures should be compiled and documented. These should be assessed for their scalability, transferability (from one country/region to another, from one industry to another, or from one plant to another) and full costs (including local variations in fuel, technology and implementation costs).
- The use of technology cost-curves to assess industrial energy efficiency potentials should be extended to include the costs incurred to build the institutions needed to implement industrial energy efficiency policies and measures as well as the cost of the policies and measures themselves. Including these programme, institutional, and other transaction costs is particularly important for developing countries where markets and institutions may not be as mature as in their developed country counterparts.
- Proprietary energy efficiency technologies and processes that have significant energy-savings potential should be identified systematically and options to facilitate the wider deployment of these technologies in developing countries and transition economies should be explored. More attention should be focused on systems approaches, especially in industries that require a range of energy services (where inpotential synergies can be taken advantage of to reduce costs.)
- Capacity needs to be built in the skills and knowledge needed to tackle industrial energy efficiency. This capacity building should be a strong focus of post-2012 climate change agreements. It should aim to identify and transfer lessons learned from successful industrial energy efficiency policies and programmes, along with information on best practice technologies and measures that can be applied in the industrial sector.
- Countries should be required to provide an assessment of potential (in terms of GHGs mitigated) and a description of their existing industrial energy efficiency policies within their formal National Communications reporting to the UN-FCCC. This will help promote the development of national energy efficiency plans, where they do not already exist.
The industrial sector is responsible for one third of global primary energy use and two fifths of global energy-related carbon dioxide (CO2) emissions. There is significant potential to reduce the amount of energy used to manufacture most commodities. The technical reduction potential ranges from about 10% to 40%for five energy-intensive industrial sub-sectors. The economic potential is smaller, but also significant.
Historically, energy efficiency has improved, and emission intensities have reduced, as countries have become more economically developed. End-use energy efficiency has the capability to reduce GHG emissions very significantly, and at low cost. Many industrial energy efficiency options reduce costs and allow for higher levels of production for the same amounts of energy use. They can therefore indirectly1help to combat poverty.
Since 1973, energy efficiency and structural change have met about 58% of the new demand for energy services in industrialised countries. Without those energy efficiency improvements, energy demand would have been considerably higher (IEA, 2008a). More conventional fuel would have had to have been supplied and used, thereby increasing GHG emissions.