Abstract

Technology choice is a central feature of economic policy in many developing countries, where progress in building an energy infrastructure, for example, is often constrained by lack of financing. Investments in energy efficiency may be more economical than a traditional supply-side-only energy strategy. An efficiency- based strategy provides both economic and environmental benefits, illustrated here by a potential project to build a compact fluorescent lamp manufacturing plant in India. However, significant market and institutional barriers hinder the implementation of such as strategy. Policy innovations such as a Global Collaborative on Energy Efficiency may be needed to overcome these barriers.

Introduction

In most developing countries, national priorities are focused on development. Development, as commonly used, does not mean merely growth in per capita income. Rather, inherent in this term is also a vision of structural change of the economic base, from one centered primarily on agriculture and natural resources to one emphasizing industrial production. A population shift from rural to urban is also envisioned. While this sounds unattractive to those who have an idyllic vision of rural life, we know of no other pathway to satisfy the needs and priorities of developing countries. Illustrative priorities are: reduced unemployment, lower infant mortality, improvements in industrial and agricultural productivity, accessible modern health care, improved nutrition, increased literacy, housing availability, access to good communication, development of a transport infrastructure, food security, industrialization, and good public hygiene. The ranking of these priorities changes in the course of development from the satisfaction of basic needs to higher-order needs (e.g., from food and shelter to vehicles, television, refrigerators, etc.).