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Washington DC October 15, 2014

Climate Change and Growth Strategies

World Bank – New Growth Strategies

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1. De-link growth from energy use using policy as a driver

2. Industry and energy efficiency should be areas of focus

3. Energy Management Systems (EnMS) is a solution

4. Restorative manufacturing or Circular Economy must play a key role

Theme

2

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Energy Productivity

3

Source OECD/IEA 2014

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Energy Consumption As A Function Of Quality Of Life

Source: Penn State University, Department of Energy and Mineral Engineering

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Energy Consumption Differences

• Efficiency of Industrial, Commercial, Residential and Transportation Energy Use

• Climate and Geography

• Lifestyles

• Nature of Products Produced By Country

6

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Delinking Growth and Energy Use

7

GDP

Energy Use

GDP

Energy Use

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• Comprehensive system of policies and programs based on a mix of government regulation and market-based approaches – Energy Conservation Law - 1999

• Current aggressive energy efficiency promotion system developed under 11th Five Year Plan (2006 – 2010) – Revised Energy Conservation Law - 2007

• Continued under 12 Five Year Plan (2011 – 2015) with focus on capacity building and implementation

• Three Institutional Groups – National, provincial and local governments

– Industrial enterprises

– Third party service and support organizations

China’s Energy Efficiency Programs

12

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Industry Accounts for 50% of Total Global Energy Use (Primary Energy Basis*)

0

100

200

300

400

500

600

700

800

900

2005 2010 2015 2020 2025 2030 2035 2040

Industrial Commercial Residential Transportation

Pri

mar

y En

ergy

Co

nsu

mp

tio

n, Q

uad

s

Source: DOE EIA International Energy Outlook 2013

4

* Includes fuel for electricity generation and T&D losses

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The U.S., China, and India Represent about 50% of Total Industrial Energy Use

0

50

100

150

200

250

300

350

400

450

2005 2010 2015 2020 2025 2030 2035 2040

U.S. Other OECD China India Other Non-OECD

Pri

mar

y En

ergy

Co

nsu

mp

tio

n, Q

uad

s

Source: DOE EIA International Energy Outlook 2013

Total Non-OECD

Total OECD

China

U.S.

India

5

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Industry is the Largest Energy Consuming Sector in the U.S., China and India

Industrial Commercial Residential Transportation

China 101.2 Quads total

India 27.4 Quads total

U.S. 97.9 Quads total

31.2% 75.5%

68.5%

Source: DOE EIA International Energy Outlook 2013

Primary energy use - 2010

6

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Transforming Industry

Production

CO2

Per

cen

t o

f 1

99

0 (

20

04

fo

r w

ater

)

20%

60%

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Achieving Energy Efficiency Potential through energy management

What is an Energy Management System (EnMS)?

•A suite of procedures and practices to ensure systematic tracking, analysis and planning

of energy use in industry

EnMS standards:

defined by standardization bodies (e.g., ISO 50001)

EnMS specifications:

formulated by a government agency

What does an EnMS System Do?

• Maximizes energy savings and improves

energy performance continuously through

organization and technology changes at the

facility and enterprise level

• Helps companies overcome informational,

behavioural and organisational barriers to

energy efficiency

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Key Elements of Energy management Systems

An EnMS includes:

• Energy policy

• Cross-divisional management

team

• A baseline

• An energy review

• Energy performance indicators

• Action plans

• Internal audits

• Third party certification

…within a Plan-Do-Check-Act framework.

Sources: A. McKane (2011), Superior Energy Performance (2011), ISO (2011).

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Continuous Cost Reduction with Energy Management

Source: Adapted from Kahlenborn et al., (2012)

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0

500

1000

1500

2000

2500

3000

3500

4 12 21 39 72 131 180 311

427 455 474 604

776 827

1208

1394

1909 2222

2671

2917 3099

3240 3357

3441

Number of ISO 50001 certified sites in GERMANY

R. Peglau (German Federal Environment Agency)

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Examples of Government Programmes that Promote EnMS

Country Program Name EnMS type Voluntary Mandatory Certification Drivers

Australia Energy Efficiency Opportunities

EEO Assessment Framework

M No Public reporting of EE opportunities

China Top 10,000 Enterprise Program

GB 23331 M Voluntary Mandatory

Denmark Agreement on Industrial Energy Efficiency (DAIEE)

ISO 50001 V Yes Tax rebate

Ireland Energy Agreements Program

ISO 50001 V Yes Extensive technical support

South Korea

GHG and Energy Target Management scheme

ISO 50001 M Yes Mandatory

Sweden Energy Efficiency in Energy Intensive Industries (PFE)

ISO 50001 V Yes Tax rebate

USA Superior Energy Performance

ISO 50001 V Voluntary Awards, possible tax rebate

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The Circular Economy – Industrial System That is Restorative By Design

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We are still losing enormous tonnages of material Million tonnes, EU27, 2010E 1. Includes services and agriculture, forestry and fishing 2. Also includes sewerage and other waste management

activities 3. Includes used oils, rubber, textiles, household waste,

chemical waste, and other non-specified

SOURCE: Eurostat waste statistics (2011)

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1. Growth strategies must consider opportunities and risks posed by climate change

2. Must delink growth from energy use

3. For industry sector, energy efficiency is key

4. Adoption of Energy Management System (EnMS) will lead to desired results in industry

5. Government policies are necessary to encourage EnMS

6. Must move to Circular Economy

Conclusions

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