International Experience with Quantifying the Co-Benefits of Energy Efficiency and Greenhouse Gas Mitigation Programs and Policies

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Improving the efficiency of energy production and consumption and switching to lower carbon energy sources can significantly decrease carbon dioxide (CO2) emissions and reduce climate change impacts. A growing body of research has found that these measures can also directly mitigate many non-climate change related human health hazards and environmental damage. Positive impacts of policies and programs that occur in addition to the intended primary policy goal are called co-benefits. Policy analysis relies on forecasting and comparing the costs of policy and program implementation and the benefits that accrue to society from implementation. GHG reduction and energy efficiency policies and programs face political resistance in part because of the difficulty of quantifying their benefits. On the one hand, climate change mitigation policy benefits are often global, long-term, and subject to large uncertainties, and subsidized energy pricing can reduce the direct monetary benefits of energy efficiency policies to below their cost. On the other hand, the co-benefits that accrue from these efforts' resultant reductions in conventional air pollution (such as improved health, agricultural productivity, reduced damage to infrastructure, and local ecosystem improvements) are generally near term, local, and more certain than climate change mitigation benefits and larger than the monetary value of energy savings. The incorporation of co-benefits into energy efficiency and climate mitigation policy and program analysis therefore might significantly increase the uptake of these policies. Faster policy uptake is especially important in developing countries because ongoing development efforts that do not consider co-benefits may lock in suboptimal technologies and infrastructure and result in high costs in future years.

Over the past two decades, studies have repeatedly documented that non-climate change related benefits of energy efficiency and fuel conversion efforts, as a part of GHG mitigation strategies, can be from between 30% to over 100% of the costs of such policies and programs strategies. Policy makers around the world are increasingly interested in including both GHG and non-GHG impacts in analyses of energy efficiency and fuel switching policies and programs and a set of methodologies has matured from the efforts of early moving jurisdictions such as the European Union, the United States, and Japan.

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