The Group of 20 (G20) Energy Efficiency Finance Task Group (EEFTG) held its first working session, which focused on enhancing understanding of the participating economies' challenges in increasing flows of energy efficiency finance and on potential opportunities for international cooperation in this area.
The Task Group, coordinated by the International Partnership for Energy Efficiency Cooperation (IPEEC), was among the six work streams announced at the G20 Leaders' Summit in November 2014.
13 March 2015: During the first working session of the Group of 20 (G20) Energy Efficiency Finance Task Group (EEFTG), participants focused on enhancing understanding of the participating economies’ challenges in increasing flows of energy efficiency finance and on potential opportunities for international cooperation in this area. The Task Group, coordinated by the International Partnership for Energy Efficiency Cooperation (IPEEC), was among the six work streams announced at the G20 Leaders’ Summit in November 2014.
The Task Group meeting, hosted by IPEEC in Paris, France, on 13 March, brought together policy makers and experts from G20 governments, international organizations and the financial sector.
Opening the meeting, Sylvie Lemmet, Co-Chair of the Task Group, and Director for European and International Affairs at the French Ministry of Ecology, Sustainable Development and Energy, noted that a number of issues still needed addressing before financial markets would be able to realize the benefits of energy efficiency investments. She also stressed the importance of scaling up investments in energy efficiency to avert climate change.
Santiago Creuheras, Co-Chair of the Task Group and Director General of Energy Efficiency at the Secretariat of Energy of Mexico (SENER), explained that, based on a recent estimate, avoiding catastrophic climate change will require global energy efficiency investments to increase by a factor of eight.
According to Anthony Cox, Head of the Climate, Biodiversity and Water Division of the Environment Directorate at the Organisation of Economic Co-operation and Development (OECD), a recent analysis had identified as key barriers to increasing finance in “green” projects: lack of a supportive policy framework; regulations with unintended consequences; absence of financial vehicles; and lack of data. Other factors identified by the working session participants included macro-level factors, such as fluctuating energy prices.
Pointing out that the availability of US$300 trillion of financial capital globally, Nick Robins, Co-Director, UNEP Inquiry into the Design of a Sustainable Financial System, suggested there was “no shortage of capital for energy efficiency” and that the unlocking of this capital might be partly achieved through policy interventions to address market failures.
Providing an example of a market failure caused by information asymmetries, Peter Sweatman, Rapporteur of the Energy Efficiency Financial Institutions Group, presented data from Europe that showed clear differences in how businesses and lenders perceive energy efficiency.
Josué Tanaka, Managing Director of Energy Efficiency, European Bank for Reconstruction and Development (EBRD), provided insights into how the EBRD has significantly increased energy efficiency finance in Europe and the Caucasus, including by establishing a network of 104 banks to finance a diverse range of projects, and financing 170 energy efficiency projects, totaling US$3.5 billion in 2014 alone.
The EEFTG provides G20 policymakers with a forum for engaging directly with members of the private and public finance community, industry and international organizations. Its main output will be a set of recommendations for the G20 Energy Sustainability Working Group on accelerating flows of finance for energy efficiency investments, in particular in the industry and in buildings, which will be presented to the G20 Leaders’ Summit in Turkey, in November 2015. The EFFTG will also create a mechanism for engaging experts in energy efficiency financing, and identify domestic and international sources of energy efficiency finance.
IPEEC, established in 2009 at the Group of 8 (G8) Summit in L’Aquila, Italy, is an autonomous international forum that aims to provide global leadership in energy efficiency by identifying and facilitating the implementation of public policies and programmes in this area. The IPEEC Secretariat is hosted at the International Energy Agency (IEA). [IISD RS Story on G20 Leaders’ Summit 2014] [Publication: G20 Energy Efficiency Action Plan: Voluntary Collaboration on Energy Efficiency] [IPEEC Website] [EEFTG Website]