Exaggerated efficiency

The benefit of transferring technologies under the Kyoto Protocol's mechanisms is questionable

Published: Thursday 31 August 2000

-- cement and steel production may be more energy efficient in many developing countries than in the us , according to a recent study published in Europe. Among the six countries studied, iron and steel production is reported to be the most energy efficient in South Korea, while Brazil, Mexico, India and China have achieved an energy efficiency level comparable to that of the us in recent years.

South Korea, Mexico, and Brazil are the most efficient countries in the production of cement, followed by India, which once again appears to have achieved comparable efficiency to the us in previous years (see graphs).

It has not been possible to directly compare energy efficiencies of different countries in the past, because of differences in the economic structure, for instance, the share of industry in the country's total economy.

However, for the first time, International Comparisons and National Commitments by Dian Phylipsen of the Utrecht-based organisation Ecofys compares energy efficiencies in the cement and steel sectors of five developing countries India, China, Brazil, Mexico and South Korea with the us . Phylipsen's study, which factors in economic structures of countries, offers new and valuable insight into the relative energy efficiencies of countries, particularly in the light of the climate negotiations.

It is usually assumed, as in studies by the World Bank and usaid , that the efficiency in developing countries is worse than in developed countries, or that developing countries will install less efficient new capacity compared to what would occur in the case of technology transfer. So industrialised countries, such as the us, have offered to trade in their 'more efficient' technologies' for credits to emit ghg s under two of the mechanisms of the Kyoto Protocol.

Joint Implementation ( ji ) involves project-based trading between industrialised countries, while the Clean Development Mechanism ( cdm ) involves project-based trading between developing countries.

Both mechanisms are based on the assumption that industrialised countries, particularly the us, have more efficient technologies to offer in exchange for emission credits. This study demonstrates that a number of key developing countries and intended host countries under the flexibility mechanisms of the climate convention are not necessarily less efficient than intended donor countries.

Although the cost of making reductions in developing countries may still be cheaper for industrialised countries, the benefit of transferring technology that is as efficient, if not less, than existing technology in developing countries, is questionable.

The key developing countries analysed in the paper are important since they are experiencing rapid growth in production and emissions. One of the major growth areas in developing countries is the production of energy-intensive bulk materials, because of currently low per capita consumption of these materials. For example, per capita cement consumption in five major developing countries is 2 to 6 times lower than the oecd average. For steel, the per capita consumption is even 2 to 20 times lower than the oecd average.

In recent years, the energy efficiency in the iron and steel sector in the countries analysed ranged from 25-70 per cent above best plant energy consumption. In the steel industry, South Korea is among the most efficient of the countries (25-30 per cent above best plant energy consumption) while the us , Mexico, India and China have achieved a lower level of energy efficiency (about 70 per cent above best plant energy consumption).

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