I have been to a number of events recently that have discussed a low carbon economy. Many participants have expressed interest in the idea, but wanted more information. In particular, one recurrent theme was "I would like to take action to reduce my greenhouse gas emissions - but it would cost too much, and I need to remain competitive!".
Yet, the view that reducing emissions will always cost money is a false one. A number of respected reports point out that there are many ways to reduce energy use, cut emissions – and save money at the same time. In South East Asia, a recent report by ReEx Capital Asia on the market potential for energy efficiency found that:
i) Investments in energy efficiency are a cost effective way to reduce greenhouse gas emissions, and save money on energy bills at the same time;
ii) South East Asia has great potential to reduce its emissions through energy efficiency improvements. The total market size for the six countries studied is estimated to be at least US$6.6 billion, with the industrial sector worth US$2.9 billion and the commercial sector US$3.7 billion;
iii) By reducing energy consumption, these investments could save large amounts of money. The annual savings potential for the 6 countries studied is about US$1.4 billion: $0.9bn in the industrial sector and $0.5bn in the commercial sector;
iv) Four countries – Singapore, the Philippines, Malaysia, and Thailand – have both the most favourable regulatory environment and the most advanced situation for Energy Service Companies (ESCOs);
v) The most favourable investment opportunities are found in the hotels sub-sector in Singapore and Philippines, with other good opportunities in the semi-conductor industry in Singapore and the chemicals industry in the Philippines. This is because energy prices in these economies are market based i.e. without subsidies;
vi) On average, energy efficiency projects in the region in the industrial sector have a payback of only 3.2 years – with some interventions offering much shorter payback periods;
vii) The implications for policymakers are clear: fuel subsidies dissuade low-carbon businesses.
Clear evidence that you can cut greenhouse gas emissions – and save money at the same time. The Executive Summary of the report can be found here, and the full report here.