Policy and Finance to Achieve the COP28 Energy Efficiency Target for ASEAN

COP28 set a goal of doubling energy efficiency improvements by 2030. This means enhancing energy efficiency across all sectors, from appliances and equipment, buildings, vehicles, and commercial and industrial processes. This chapter examines the issues, barriers to rapid improvement, and policy options to inform Nationally Declared Contributions (NDCs). Energy demand is expected to double or more over the period to 2050. There is a stock of equipment, which can take many years to replace. Efficiency improves slowly unless equipment replacement cycles are accelerated. Energy efficiency is an important part of energy planning. Greater energy efficiency can reduce or postpone the need for energy generation and grid infrastructure. It also implies reduced or changed investment. One approach is to change the products manufacturers offer to the market through a mix of information (e.g., energy labels), incentives to promote innovation in supply (e.g., tax benefits or rebates for the better products), and minimum standards to eliminate the worst products. This process has become known as market transformation (e.g., Hinnells and Boardman, 2009). Such an integrated approach has only been partially implemented in ASEAN. Thus, the chapter offers an approach to drive efficiency using additional policy and finance to achieve the 4% per annum improvement goals set out in COP28 for ASEAN through market transformation.