The International Finance Corporation (IFC) has weighed in on energy efficiency.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. It’s in such countries that climate change is predicted to hit hardest.
This status gives IFC’s words and position massive clout. IFC’s report, entitled Creating Markets for Climate Business, says making buildings more energy efficient could reduce carbon emissions dramatically, but only if countries adopt better building codes and higher standards too.
It’s a riveting piece of news, which should catalyse debate in both emerging and developed markets. What’s behind the IFC claims?
IFC lays it on the line for energy efficiency
The IFC offers compelling headline stats on what the right mix of energy efficiency, codes and standards can offer to mitigate global C02.
In Indonesia, for example, regulations created with IFC support have mandated energy efficiency requirements for large buildings throughout the capital.
This opened the door for the private sector to supply solutions; IFC now estimates the benefits include avoiding over 700,000 metric tons of carbon emissions, plus energy savings of almost $70 million in the last 3 years.
There are more astonishing figures. IFC says investments in green buildings could reach $3.4 trillion by 2025 in key emerging markets. That’s a huge chunk for energy efficiency firms to win.
But this will happen only if developing countries adopt the best building codes and standards and create targeted financial incentives such as green building certification and mandatory benchmarking of energy use.
At Energys, we take this underlying theme from the news…
If such trillions can be leveraged for C02 mitigation and energy efficiency in emerging markets, where financial resources are stretched, just consider what we ought to be achieving at home to help lead C02 reduction.
The opportunities are there, but they will cost
Overall, IFC’s report says energy efficiency in buildings needs an additional $296 billion globally, per year, to meet existing climate targets.
In terms of the standards both developed and emerging states require along with the cash; these must set minimum thresholds for energy performance, requiring certification to dedicated criteria.
In addition, programmes and codes should organise building data into a standardised format, that can be used to develop building benchmarking schemes; crucial for differentiating greener, more energy efficient buildings in the real estate market.
Without these elements, a lack of reliable data and awareness about energy efficiency and green building can hinder efforts to create a viable market.
Philippe Le Houérou, Chief Executive of the IFC, said: “The private sector holds the key to fighting climate change.
“We can help unlock more private sector investment, but this also requires government reforms as well as innovative business models, which together will create new markets and attract the necessary investment. This can fulfil the promises of Paris.”
What does it all mean at home in the UK?
“When we see a report that highlights how codes, standards and investment can build emerging market energy efficiency, we must then apply this thinking to how the UK, an established market, should be leading,” comments Kevin Cox, Managing Director, Energys.
“The sums and the benefits the IFC is talking about are vastly significant. Of course, many energy efficiency codes and standards for buildings already exist here in the UK.
“The Government has recently promised to consult on improving the energy efficiency of new and existing commercial buildings, and on raising minimum standards of energy efficiency for rented commercial buildings in its Clean Growth Strategy.
“Could we see the UK taking a stronger position in the field, and providing the leadership IFC proves could be so valuable in helping our own and developing markets mitigate carbon?”
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