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Return on Investment from Industrial Energy Efficiency: Evidence from Developing Countries

Author

Listed:
  • Ludovico Alcorta

    (United Nations Industrial Development Organization)

  • Morgan Bazilian

    (United Nations Industrial Development Organization)

  • Giuseppe De Simone

    (United Nations Industrial Development Organization)

  • Ascha Pedersen

    (United Nations Industrial Development Organization)

Abstract

Energy efficiency is a foundation of any good energy policy. The economic, security, and environmental benefits of energy efficiency have been recognized for decades. We explore energy efficiency policy insights derived from survey work in developing countries in 119 projects across nine manufacturing sub-sectors. The methodology utilises financial return calculations to highlight gaps and opportunities for meeting the potential of energy efficiency projects in the manufacturing sector. We find a generally very high level of internal rates of return at a project level - with payback periods ranging from 0.9 to 2.9 years; but note that these metrics do not always appropriately influence corporate decision-making for a number of well-understood reasons.

Suggested Citation

  • Ludovico Alcorta & Morgan Bazilian & Giuseppe De Simone & Ascha Pedersen, 2012. "Return on Investment from Industrial Energy Efficiency: Evidence from Developing Countries," Working Papers 2012.35, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2012.35
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    References listed on IDEAS

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    Cited by:

    1. Sylvia Gaylord & Kathleen J. Hancock, 2013. "Developing world: national energy strategies," Chapters,in: International Handbook of Energy Security, chapter 10, pages 206-236 Edward Elgar Publishing.

    More about this item

    Keywords

    Energy Efficiency; Energy Investment; Energy And Development; Industrial Development;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics

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