Energy Efficiency in the Developing World
The literature assessing demand-side energy efficiency potential, and the policies that can be deployed to tap this potential has traditionally focused on developed and emerging economies. We review the state of knowledge on demand-side energy efficiency investments, and reframe the discussion in terms that are better suited to a low
income country setting. This reframing opens up new lines of inquiry which have been under-emphasized to date. We provide a conceptual framework for exploring questions concerning the returns on investment in energy efficiency, market failures and barriers that can lead to under-investment, rebound effects, and policies designed to accelerate cost-effective investment. We highlight some institutional considerations that should inform policy prioritization and implementation in LIC settings. A case study of a large scale efficiency program in India underscores both the challenges and the potential for welfare improving energy efficiency programs in the developing world.