IEA Report Calls for New Funding for Energy Efficiency in Developing Countries
22 December 2012: The International Energy Agency (IEA) has released a report, titled "Plugging the Energy Efficiency Gap with Climate Finance." The report examines the role of climate finance in funding energy efficiency projects and the potential to channel funds to energy efficiency projects in developing countries under the Green Climate Fund (GCF).
The report calls for significant increases in financing for energy efficiency, noting that energy efficiency amounts to a very small portion of the US$343-385 billion flowing into climate finance per annum. According to the report, the GCF could be designed to support cost-effective energy efficiency actions with co-benefits for climate change mitigation and developing country economies. The report also underscores that the levels, modalities, and opportunities for financing energy efficiency vary significantly between emerging economies and low-income counties.
The report recommends, inter alia, flexible criteria for project eligibility, funding for policy and program development, evaluation of funding on outcomes, and a dedicated share of funds for energy efficiency projects. It also proposes a new carbon market mechanism under the UN Framework Convention on Climate Change (UNFCCC), which would go beyond the Clean Development Mechanism to allow for direct carbon financing in support of domestic policy frameworks. [Publication: Plugging the Energy Efficiency Gap with Climate Finance]