INDEX FOR INVESTORS (HIFI) - HELIO...

INDEX FORINVESTORS (HIFI)

HELIO

HELIOInternational

Methodology and Instructions MANUAL

ACKNOWLEDGEMENTS

The HELIO Index for Investors (HIFI) is the result of a long-time effort which started publicly in 2007 at a workshop we held in Indonesia. Since then, quite a number of people have had a say in it. We feel confident that having successfully held the passage of time, this Index is robust and will be useful.

The latest round of contributors are the members of the Advisory Committee who kindly reviewed the text. They are Hazel Henderson, Molly Melluish, Axel Michaelowa, Mithra Moezzi, Fulai Sheng and Steve Thorne. Collectively those “Sages” possess a spectacular expertise in the financial and climate arcanes where investors evolve. Their involvement in the HELIO Index will undoubtedly help its reputation and dissemination, and we wish to thank them whole-heartedly for their contribution.

This Manual is updating and improving earlier texts and was written by Akmal Abdurazakov under the guidance of José Pineda and Hélène Connor.

In previous stages of work, contributions from Patrick Bolton, Christian Doualla, Geurt van de Kerk, Christine Fiebig, Richard Heede, Emilio La Rovere, Hannah Murdock, Sreeparna Paul, Laszlo Pinter, Martin Roach, John Robinson, Fulai Sheng, Candice Stevens and Laura Williamson were particularly appreciated.

Dr. Hélène Connor, Founder and Honorary President

Paris, October 18, 2015.

Contact: [email protected]

© HELIO International

Photo credits:p.2: © Back Balcombe n p.4: © Abbie Trayler-Smith / Panos Pictures / Department for International Development n p.9: © Asian Development Bank n p.24: USAID / Sameer Halai n p.27: Panos Pictures / Department for International Development / Abbie Trayler-Smith n p.29: SolarAid / Corrie Wingate

Graphic design: MH DESIGN / Maro Haas, Les Lilas, France

TABLE OF CONTENTS

1] INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2] USING A CAPITAL APPROACH TO DEFINE THE ENERGY INVESTMENT AND SUSTAINABILITY NEXUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.1. Economic welfare through the prism of energy productivity transformation and the green economy . . . . . . . . . . . . . . 4 • Global cooperation on energy efficiency and promoting a green economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 • Energy efficiency and a nation’s patrimony: five forms of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.2. The need for an Energy Investment Guide towards Ecodevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3] HIFI: CONCEPT AND METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.1. Framework and scope of the HELIO Index For Investors (HIFI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 • The Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

3.2. Description of TIPEE indicators and data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.2.1. Selected elements of the Natural capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.2.2. Selected components of the Social capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.2.3. Contribution to the Human capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.2.4. Selected elements of the Financial capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 3.2.5. Selected components of the Produced capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4] USING THE HELIO INDEX FOR INVESTORS (HIFI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 4.1. A complete HIFI test for Togo and Cameroon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 4.2. Scaling-up the use of HIFI and global reach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

5] CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

6] BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

7] BRIEF OVERVIEW OF EXISTING INDEXES ON ENERGY INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

8] ANNEXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

LIST OF TABLES, BOXES AND FIGURES:

Figure 1.1 Interactive components of Ecodevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Box 2.1 Positive spillovers of energy efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Figure 2.1 Energy productivity and economic welfare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Box 3.1 Selection of TIPEE indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Figure 3.1 Schematic presentation of HIFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Figure 3.2 Construction of HIFI based on TIPEE indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Table 4.1 Some development indicators and HIFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Figure 4.1 TIPEE scores of HIFI indicators for Togo and Cameroon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Figure 4.2 Values of Forms of Capital for Togo and Cameroon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Figure 4.3 HIFI-10 and income based on data for 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Table 7.1 Sustainable energy indices predating HIFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Figure 8.1 Asymptotic features of inverse-logit function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Table 8.1 HIFI-10 indicators and targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Table 8.2 HIFI indicators and its parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Table 8.3 Ranking countries by HIFI-10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

2 / HELIO Index for Investors (HIFI)

INTERACTIVE COMPONENTS OF ECODEVELOPMENT

Humans, utilising usufructal technologies use natural resources; through participatory governance, markets are controlled and regulated. It is through these processes and interactions that ecodevelopment is achieved.

HUMANKIND

NATURE MARKETS

PARTICIPATORY GOVERNANCE

USUFRUCTAL TECHNOLOGY

ECODEVELOPMENT

Source : HELIO International

FIGURE 1.1

INTRODUCTION In the next few years, trillions of dollars of investments will be spent in the energy sector. What criteria will guide investors and government policy-makers?

Indeed, there is a growing need in the sustainable investment community for tools that provide timely information on the quality of country policies. This need stems from the desire of investors to target improved efficiency and direct their investments towards socially

responsible alternatives that lead to ecodevelopment. For this allocation to be effective, tools are needed to both identify these investments and to help to measure their ex-post performance. The HELIO Index for Investors (HIFI) aims to fill these needs by helping financiers

1

HELIO Index for Investors (HIFI) /3

BRIEF INFORMATION ABOUT HELIO INTERNATIONALHELIO International is a non-profit independent think tank studying energy policy and ecodevelopment since 1996. The organisation is composed of a world-wide network of known energy analysts who identify, assess, measure and publicise the contribution of energy systems and policies to ecodevelopment (sustainable and equitable development).

HELIO develops tools that are shared with other analysts and NGOs worldwide. HELIO’s Sustainable Energy Watch indicators are used to evaluate national energy systems and policies and to inform decision-makers about their effectiveness.

HELIO also developed CDM indicators to assess the contribution of Clean Development Mechanism (CDM) and Joint Implementation (JI) projects to the ecodevelopment of host countries. These indicators helped the Designated National Authority (DNA) of several countries develop their own assessment criteria. The indicators were also the basis for the work of SouthSouthNorth and for the creation of the international Gold Standard for climate projects.

around the world to identify countries that best suit their objectives – i.e. those in which policies, and particularly energy policies, are truly conducive to ecodevelopment.

Ecodevelopment builds on the concept of traditional sustainable development1 by bringing in two additional elements which are necessary for long-term success in the energy field: usufructal technologies2 and participative governance. Ecodevelopment can only be achieved when all forms of capital (financial, produced, natural, human and social capital) are truly operating in harmony, reinforcing one another.

Managing energy wisely is essential to the economic and social development of a country, as well as to environmental protection and climate change mitigation and adaptation. In order for a country to achieve balanced growth while reducing its ecological footprint, it is crucial to have reliable tools that can measure and monitor how well a country’s energy policy supports ecodevelopment goals.

Over the last two decades, HELIO devised methodologies to help decision-makers and other stakeholders assess the degree to which a given country’s policies provide its population with clean and efficient energy services that are reliable, affordable and resilient to the impacts of environmental degradation and climate change. The resulting methodology, TIPEE,3 was successfully tested in a number of Africa’s most vulnerable countries. This

1. Elements of Sustainable Development: environment, society, culture, and economy (the Brundtland pillars).

OECD: Ecodevelopment refers to development at regional and local levels, consistent with the potentials of the area involved, with attention given to the adequate and rational use of natural resources, technological styles and organisational forms that respect the natural ecosystems and local social and cultural patterns.

2. Usufructal technologies only use renewable, harmless forms of energy and do not rely on fossil stocks.

3. TIPEE is a French acronym that stands for “Traitement de l’information pour des politiques énergétiques favorisant l’écodéveloppement”, or in English “Processing Information for Energy Policies Conducive to Ecodevelopment.” For a complete description see www.helio-international.org/projects/TIPEE.cfm. Project developed with the Institut de l’énergie des pays de la francophonie (IEPF).

accumulated knowledge has now been encapsulated into a single index: the HIFI is a composite index that groups the 24 TIPEE indicators among the five forms of capital.

The main advantages of HIFI are that:

it is founded on the Working Group on Statistics for Sustainable Development (WGSSD) framework.4 Accordingly, HIFI provides a multi-faceted view on sustainable energy investments;

it can cover all world’s countries, enabling rigorous comparisons on a global scale;

it focuses on policies that are within the control of policy makers in the energy sector.

The HIFI allows all stakeholders – investors, policy-makers and members of civil society – to monitor the effectiveness of national policies, thus helping to identify opportunities for successful investment in climate-proof, sustainable energy projects. This tool acts as a signal for investors to invest in a country where projects are likely to be more successful and profitable. It will also allow investors to compare performance across countries and identify those that offer better conditions for investment in energy projects. In this way, HIFI will also prompt countries to improve their own energy policies.

HIFI, which aims to promote sound energy investments in economic, environmental, technological, civic and societal terms through assessments of conditions and policies at country level, will generate a unique set of primary data that will be available to parties wishing to conduct research. Unlike some initiatives that are carried out on a one-time basis or updated infrequently, HIFI can be updated regularly by those who find it useful for their own purpose.

4. United Nations Economic Commission for Europe (UNECE), Conference of European Statisticians Recommendations on Measuring Sustainable Development, 2014.

www.helio-international.org/projects/TIPEE.cfm


USING A CAPITAL APPROACH TO DEFINE THE ENERGY INVESTMENT AND SUSTAINABILITY NEXUS

2.1. ECONOMIC WELFARE THROUGH THE PRISM OF ENERGY PRODUCTIVITY TRANSFORMATION AND THE GREEN ECONOMYThere is something inherently human about the desire to find new forms of energy and use them more effectively in the pursuit of our goals. However, conventional thinking on energy efficiency has typically been conducted in the fairly narrow terms of its energy saving potential (in relative terms), and more recently its greenhouse gas mitigating capabilities.

This view is starting to shift, informed by new types of targets based around the notion of energy productivity. Energy productivity is a concept that can reframe the focus of policy makers away from energy strict conservation or conventional definitions of energy efficiency and towards how energy can best be used to enhance social welfare. Targets are set in term of relating economic outputs to energy inputs (typically GDP and total primary energy supply). But GDP provides only a partial picture of how effective a society is at using energy to achieve its goals, so (from a perspective of ecodevelopment) a range of complementary measures related to a broader range of outputs is required to monitor progress. Shifting from speaking about energy efficiency and intensity to energy productivity across a range of indicators is therefore an important part of the transformation. It is common to see

consumers or governments promoting the significant social and economic benefits of increasing energy supply, while it is rare to see either group recognising that using energy more productively generates similar benefits, often at lower long run marginal costs. Indeed, the IEA estimates only around 20-30% of identified viable energy efficiency potentials have been realised .1 While this suggests that a significant potential for energy productivity-led economic growth exists, different cultural and market contexts suggest that there is little insight in the search for so-called “optimal” methods for implementing substantial energy efficiency.

The 2011 United Nations Environment Programme (UNEP) Green Economy Report also argues “… an economy must not only be efficient, but also fair. Fairness implies recognising global and country level equity dimensions, particularly in assuring a just

1. International Energy Agency (IEA). Capturing the Multiple Benefits of Energy Efficiency, 2014; John “Skip” Laitner Green has also shown that the US economy uses only 18-20% of the energy input it extracts, the rest is thrown off as waste, pollution, etc. mainly due to grossly inefficient infrastructures and urban design (according to Green Transition Scoreboard® – access at www.greentransitionscoreboard.com or www.ethicalmarkets.com).

2

www.greentransitionscoreboard.com

www.ethicalmarkets.com


Source: IEA, KAPSARC 2014.

transition to an economy that is low-carbon, resource efficient, and socially inclusive”.2 The genuine desire of governments across the world to reduce local pollution and combat climate change appears to be gathering pace: government-funded incentives to produce more renewable energy generating power stations and increasing the tax on carbon-emitting power sources are on the uptick.

Onshore wind is leading the global surge in renewable energy production, accounting for over a third of the observed capacity and generation spike. Solar power accounts for another third, and hydroelectric power produces a fifth of new renewable power generation. The cost of constructing renewable energy power stations, wind turbines and solar panels is also decreasing in the medium term. On top of this, the International Energy Agency (IEA) has recently declared that over 26% of the world’s energy supply will come from renewable energy sources by the end of the decade.3 The United Nations Environment Programme (UNEP) also reports that the renewable energy sector created 6.5 million jobs worldwide in 2013.4

Global cooperation on energy efficiency and promoting a green economy

Since the G8 Gleneagles focus on energy efficiency in 2008, there has been an increasing number of agencies and programs pursuing energy efficiency. The United

2. www.unep.org/greeneconomy/Portals/88/documents/ger/GER_synthesis_en.pdf.

3. https://www.iea.org/Textbase/npsum/MTrenew2015sum.pdf.4. www.unep.org/greeneconomy/Portals/88/documents/ger/

IGE%20NARRATIVE%20SUMMARY_Web.pdf

Nations Sustainable Energy for All initiative (SE4All) is pursuing a global ambition to double the rate of improvement of energy efficiency by 2030. This has resonated around the world, and through the UN’s five regional commissions, the SE4All initiative is achieving global reach. Energy efficiency is on regional government agendas with both the C40 and Covenant of Mayors

Employement and

job creationAir pollution

and GHG

Infrastructure investment and

development

Output quality

Energy accessEnergy prices

and government finances

Energy savings and energy

security

Profitability and competitiveness

Energy productivity and economic

welfare

FIGURE 2.1

ENERGY PRODUCTIVITY AND ECONOMIC WELFARE

BOX 2.1 POSITIVE SPILLOVERS OF ENERGY EFFICIENCY Many organisations have sought to make the case for policies that support energy efficiency that extend beyond the simple economic returns to the investor. One such example is work undertaken by the IEA in Capturing the Multiple Benefits of Energy Efficiency. It highlights the considerable additional value of social and economic outcomes resulting from energy efficiency investments. Benefits include:

• Between 0.25% and 1.1% extra GDP growth per annum from enhanced energy efficiency investment

• A 5% to 30% improvement in the government’s financial balance

• 8 -27 jobs per million euros of energy efficiency investment

• Up to a 400% return on investment in insulation including from lower healthcare costs in cool climates

• Profitability gains of between 40% and 250% of the value of energy cost-reductions from energy efficiency investments

• Up to 240% returns on utility investments in consumer energy efficiency.

Source: IEA, 2014.

www.unep.org/greeneconomy/Portals/88/documents/ger/GER_synthesis_en.pdf

www.unep.org/greeneconomy/Portals/88/documents/ger/GER_synthesis_en.pdf

https://www.iea.org/Textbase/npsum/MTrenew2015sum.pdf

www.unep.org/greeneconomy/Portals/88/documents/ger/IGE%20NARRATIVE%20SUMMARY_Web.pdf

www.unep.org/greeneconomy/Portals/88/documents/ger/IGE%20NARRATIVE%20SUMMARY_Web.pdf


processes developing capability in local governments. The World Energy Council, Major Economies Forum, Clean Energy Ministerial, United Nations Framework Convention on Climate Change, League of Arab States and G20 have each developed a focus on energy efficiency within their broader mandates.

Energy efficiency cooperation platforms, like the International Partnership for Energy Efficiency Cooperation and the Clean Energy Solutions Centre, are good options for collaborative progress for those countries that are less inclined to engage on global greenhouse gas (GHG) reduction processes. Importantly, the Multilateral Development Banks (such as the World Bank, African Development Bank and others) have also established sustainable energy portfolios that prioritise energy efficiency investments. The recent expansion of this pool of international bodies, each with a focus on energy efficiency, has led some to call for improved coordination.

However, perhaps the greatest priority is to develop capacity within individual countries, so that energy efficiency can contribute to meeting welfare needs and economic development goals. Rapid progress is already being made in existing commitments to energy productivity by China and the EU. With the focus of US technical innovation capabilities being motivated by the bipartisan energy policy goal to double energy productivity of the US economy by 2030, the scope for energy efficiency cooperation is substantially greater.

The US energy services company 5 (ESCo) market was worth $8 billion in 2013 and is growing at 20% per year. China’s ESCo market is estimated at around $12 billion and growing towards a potential scale of around $100 billion per year. As is often the way, international policy seems likely to follow initiatives at the industry and national level and codify the accepted norms. With the interconnected nature of global supply chains and the tendency of innovation to spread from innovating economies to those who adopt rather than generate new technologies, actions in a few major economies can have global ramifications.

There is a tension between the perspective that constraints in energy supply and global GHG levels will require accepting lower standards of living and the perspective that increasing energy use will improve living standards, health, productivity and welfare of citizens, especially in developing countries. However, such goals of improving the latter aims while reducing GHG emissions and energy use could be better achieved with higher energy productivity. There are several analyses of the potential global economic gains coming from energy productivity improvements. For example, in

5. ESCOs tend to focus on a broader range of targets vs. simple returns.

their Efficient World Scenario in the 2012 World Energy Outlook, the IEA identifies a possible boost in global economic output of an additional $18 trillion through to 2035. Additional energy efficiency investment of $11 .8 trillion in new, more efficient infrastructure is required to achieve this over the period, but this is more than offset by the anticipated $17 .5 trillion of avoided fuel costs, and $5 .9 trillion of avoided supply-side investment . The IEA’s analysis suggests emerging economies benefit most significantly from the global expansion of energy productivity.

Energy efficiency and a nation’s patrimony: Five forms of capital

The HIFI is aimed at promoting sound energy investments in economic, environmental, technological, civic and social terms through assessing energy conditions and policies at the country level . Economic theory has traditionally focused on investment and physical capital accumulation as the central determining factors for growth and progress. Economic development is seen here as stemming from the expansion of markets and increasing financial and material investments. The emphasis has been on well-being derived from consumption as traditionally defined: the enjoyment of goods and services purchased in the market.

Traditional economic theory has now been extended to address the broader question of how to secure economic growth and well-being over time6. Within the paradigms of sustainable development and ecodevelopment, well-being is seen to be a function of consumption in a much broader sense, namely the totality of resources upon which we are able to draw to support ourselves in the long-term. All goods and services can be viewed as being produced through the use of capital as broadly defined.

From this perspective, a “capital approach” to measuring development and progress was developed in 2009 by a Joint Working Group on Statistics for Sustainable Development established by the OECD, UNECE and EUROSTAT.7 It is based on the view that the health of an economy and the well-being of society depend on the quality and quantity of a range of goods and services, including financial resources as well as those provided by nature and human values. These different types of resources can be measured through a set of indicators based on available statistics.

6. Along with advancement in economic thought, the necessity of the more proactive shift from ‘efficacy’ to ‘equity’ based policy making is an urgent call from academic circles and civil society.

7. In addition, the World Bank vision of Adjusted Net Savings and the Inclusive Wealth Report 2014 Measuring Progress Toward Sustainability (UNEP) represent efforts with a comprehensive view of capital.


In the “capital approach,” a country’s total capital base is seen to comprise five individual stocks:

1) natural capital in the form of natural resources, air, land and ecosystems providing goods and services such as waste absorption;

2) social capital in the form of functioning social networks and institutions often embodying intellectual assets8;

3) human capital in the form of an educated, happy and healthy workforce;

4) financial capital like stocks, bonds and currency deposits; and

5) produced capital like machinery, buildings, monuments, telecommunications and other types of infrastructure.

These five forms of capital are not equally understood, either conceptually or empirically. While there are standard statistics for financial and produced capital, the other capital assets may contribute to well-being outside of the traditional market place and therefore are not as easily measured. In the case of natural capital, many environmental assets from which human beings derive well-being are not generally traded on markets. In terms of human capital, education and good health make for better workers, but also for better parents and members of society. Social capital is the least understood form and is not materially or directly observable, although indirect methods have been developed for valuing this asset.

8. Forms of intangible intellectual capital : services, finance, patents, brands, copyrights, and all kinds of media and communication platforms, print, radio, internet, and others. Two new accounting standards being used are those of IIRC www.iirc.org (EU) and SASB (Sustainable Accounting Standards Board) www.sasb.org in the USA.

Sound energy investments can only be made in countries where the total capital base -- financial, produced, natural, human and social capital -- is managed in a way that secures its maintenance and reproduction over time . The various types of capital are interdependent and all are necessary to secure economic growth and development. The central questions are whether financial, produced, natural, human and social capital stocks per capita are increasing or declining and what the implications of these changes for the economy and investment environment are. This focus also helps clarify the inevitable trade-offs that must be weighed as economies develop. For example, if one capital stock – e.g. petroleum wealth – declines, the capital framework might allow us to try and assess whether it is being offset by growth of another stock, e.g. human capital. However there is no perfect substitution of one form of capital for another.

The HELIO Index for Investors (HIFI) is concerned with the attractiveness of a country for energy investments as determined by its management of the range of capital assets related to energy markets . It analyses the main energy elements in terms of the five forms of capital, which are all vital for achieving ecodevelopment and hence are equally weighted to derive the overall HIFI. In this regard, for example, financial capital includes energy investments and energy imports; produced capital includes electricity supply and energy infrastructure; natural capital is seen as affected by energy pollutants and greenhouse gas emissions; human capital is evaluated in terms of technical capacity and energy access; and social capital is reflected in energy governance practices. It is the sum of these elements that determine the long-term viability of energy investments in a given country.

2.2. THE NEED FOR AN ENERGY INVESTMENT GUIDE TOWARDS ECODEVELOPMENTThe pace, scale and now geographical spread of clean energy investments is one of the most positive and remarkable transitions of the past few years. According to the Green Transition Scoreboard®, total private investments in renewable energy, efficiency and green technologies since 2007 now stands at 6.22 trillion US dollars.

Sustaining the uptake of renewable energies will be crucial to the success of both interconnected agendas and speaks to the urgent tasks of overcoming poverty and delivering global prosperity in a way that keeps humanity’s footprint within planetary boundaries.

Renewable energy has been thriving despite an unequal playing field with respect to fossil fuels and

the $600 to $800 billion of subsidies they continue to attract. The costs of fossil fuel-based generation, ranging from the impacts on human health to damage to buildings and ecosystems such as forests, water demand and, yes, climate change, are also currently outside the ledgers of profit and loss . If renewable and clean energy systems are to reach their full potential over the medium to long term, these imbalances need to be addressed and these externalities recognised and quantified.

Ensuring effective green energy policymaking and adequate investments decisions requires a robust set of indicators to identify major issues, formulate appropriate policy responses and assess, and evaluate the potential policy impacts. Indicators used in each of these major

www.iirc.org

www.sasb.org


policy-making stages are metrics that capture the nexus that connects economic performance, environmental status and social dynamics.

The HELIO Index for Investors fills this need by identifying those countries that provide the best support for the development of socially responsible energy policies and companies .

The global financial system, its institutions and actors, can mobilise capital for investment in sustainable development goals. There is a wide range of prospective private sector sources of development finance. Innovative financing solutions to support ecodevelopment, including new financial instruments, investment funds and financing approaches, have the potential to contribute significantly to the realisation of ecodevelopment goals. To date, however, they have remained relatively small in scale and limited in scope. Sources of innovative finance may operate on the margins of capital markets and, when linked to discretionary donor budgets, are not always stable.

To achieve scale and scope, existing and innovative financial instruments and funding mechanisms to raise resources for investment in ecodevelopment goals need to be supported, adapted to purpose and scaled up as appropriate. Beyond measures for financing, consideration should be given to encouraging the private (and public) sectors, both foreign and domestic, to invest better.

What country experiences can be drawn on to devise appropriate policies and mechanisms for doing so? Among others, consideration may be given to the following:

• Partnerships between outward investment agencies in home countries and investment promotion agencies in host countries,

• Facilitation measures to support financial instruments dedicated to sustainable development goals and impact investing initiatives,

• Means of implementation of policies, in order to ensure a better use of innovative mechanisms and reduce constraints on investors.

It is the view of many policymakers that the rapidly changing conditions in energy markets and in technologies are exacerbating the difficulty of coping with changing patterns of energy supply and demand. Policymakers call upon the energy industry to be proactive in providing expert input to help them keep abreast of developments, to help manage more diversified and more complex systems, and to avoid locking into configurations that could potentially rapidly become obsolete. They also highlight the difficulty of building consensus and a long-term vision on energy goals, and they call upon industry to make a more visible contribution to the public debate. Further, they stress the need for industry to engage with them to identify how best to allocate risk in energy investments where it can be best managed, as well as taking a lead role in driving the investments needed to fill the energy gap and support the transition to low-carbon solutions. One specific proposal is to increase the involvement of non-traditional investors, who will need help to become comfortable enough to make sizeable investments in what is for them an unfamiliar sector.

By 2030, the United Nations hopes there will be universal access to modern energy services, a doubling of the share of renewable energy sources in the global energy mix, and a doubling of the global rate of improvement in energy efficiency. But after decades of work to advance sustainable energy solutions, the energy gap continues to grow as energy systems around the world struggle under significant strain.

The transition towards ecodevelopment must be a priority across all facets of the post-2015 development agenda in order to reduce poverty and growing inequity, achieve prosperity and gender equality, and improve livelihoods through better health and decent jobs . A green transformation holds the potential to sustain a healthy planet where ecosystems are well managed and human well-being is preserved for future generations.


HIFI: CONCEPT AND METHODOLOGY

3.1. FRAMEWORK AND SCOPE OF HIFIThe HELIO Index for Investors (HIFI) is a tool designed to help international investors select good opportunities in countries where energy policies are truly conducive to ecodevelopment. This comprehensive index is unique in that it has distinct characteristics that acknowledge

the role of participatory governance and usufructal technologies, as well as the need to reinforce the five forms of capital while taking into account climate change constraints . This multi-focused approach provides an easy to calculate perspective of a national

BOX 3.1 SELECTION OF TIPEE INDICATORS The selection of indicators used in TIPEE -and therefore in HIFI- is the result of the study of energy policies and their contribution to ecodevelopment made by the HELIO experts since 1997. These indicators meet the basic criteria of being relevant, easy to calculate, simple to understand and use, appropriate to the energy sector, and calling upon databases generally available for all countries.

The first indicators were developed in 1997 under the Sustainable Energy Watch (SEW)1 project and presented at the Rio + 5 Summit.2 They were meant to survey the actual energy situation of a country using calculations for four components: environment, society, economy, and technology. A second and third series of SEW reports were published in 2002 for the Johannesburg World Summit on Sustainable Development (Rio +10) and 2006 as a contribution to CSD 14.3

Governance indicators were added later to emphasise the necessity to involve all stakeholders and therefore they

stress the need for high quality information, transparency and genuine citizen participation to get a valid involvement in the decision-making processes . Following HELIO’s work on Vulnerability Adaptation Resilience of energy systems (VAR)4, vulnerability and resilience indicators were developed in 2009. The objective of these new elements was to measure how robust a particular energy system is in anticipating climate change impacts.

While incorporating the above described research, TIPEE’s overall indicators help to assess the capacity of a country energy policy to face climate impacts and favour ecodevelopment. The improvement of an indicator across time will represent a real progress towards an energy system aiming at achieving improved well-being for humankind coping with climate change. The TIPEE project outlines these viability schedules not as final statements, as nobody is able to say what actual long term viability represents, but rather as a series of benchmarking.

3


HIFI

Human capital - CHC

Natural capital - CNC

Social capital - CSC

Household energy burdenPollution Citizen participation

Deforestation Balanced governance Local technical capacity

Produced capital - CPC

Financial capital - CFC

Insurance

Investment assets

Income control

Renewable energy

TIPEE indicators adjusted to targets and goals

Electricity accessGHG emissions Informed consultation

Energy efficiency

Quality of electricity supply

Vulnerability of thermal power supply

Mobilisation of renewable energy

potential

Vulnerability of renewable power

systemsNon-renewable energy

import

Vulnerability of transmission lines

Non-renewable energy reserves

Scientific information

Siting guidelines

Crisis management

FIGURE 3.1 SCHEMATIC PRESENTATION OF HIFI

energy system within any social, economic, and environmental context. Analysing this complexity is the result of years of work and the end product is the TIPEE indicators.5 1 2 3 4 5

The HIFI is building on the TIPEE methodology and covers many aspects that best favour long-term sustainability, hence ecodevelopment. It will allow a worldwide use and analysis of the factors of a country energy system as they relate to ecodevelopment. These factors have been studied by HELIO’s experts during the last 16 years and synthesised in the HIFI methodology.

TIPEE indicators consist of two types of indicators: quantitative and qualitative. While it is easy to identify quantitative indicators, because the statistics exist and are usually internationally comparable, HELIO designed a specific approach to address the qualitative indicators within the TIPEE framework. Figure 3 .1 shows the typology of TIPEE indicators used to construct HIFI.

HELIO generates a unique set of primary data and statistical data series that are attributed to 9 qualitative and 15 quantitative TIPEE indicators. A practical realisation of this database has been shown in reports prepared for Togo and Cameroon.6

1. See www.helio-international.org/energywatch/SEWabout.cfm for project and methodological details.

2. International event held in Rio de Janeiro to commemorate five year anniversary of the United Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro, Brazil.

3. 14th session of the United Nations Commission on Sustainable Development.

4. The VAR project was carried out in partnership with the French Ministry of European and Foreign Affairs (MAEE) and with Die Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) in Germany. See www.helio-international.org/projects/VAR.cfm for project details.

5. See note page 4.6. www.helio-international.org/publications/

The Methodology

HIFI is defined by the equally weighted average of the five forms of capital’s score. To obtain a score for each form of capital, TIPEE indicators are classified into a corresponding capital as shown in Figure 3 .1.

The 24 TIPEE indicators reflect the elements of a climate-resilient energy policy leading to ecodevelopment . Each of the five capitals are calculated as the equally weighted average of the underlying indicators (Figure 3 .2). The HIFI is calculated as the equally weighted average of the 5 capitals.

The HIFI is calculated as:

In which,

Where,HIFI – value of the HELIO Index for Investors.Cx – value of the index for the given form of capital x (natural, human, social, produced and financial capital).

Ixi – sustainable energy investments indicator in the form of capital x.

www.helio-international.org/energywatch/SEWabout.cfm

www.helio-international.org/projects/VAR.cfm

www.helio-international.org/projects/VAR.cfm

www.helio-international.org/publications/


Nx – number of indicators in the form of capital x.

The calculation of Ixi is based on normalised values of corresponding parameters of the selected indicator. The normalisation is conducted by using the feature scaling method. This method is used to bring all values into the range [0,1]. This is also called unity-based normalisation. The general formula is given as:

where x is an actual/original value, x’ is the normalised value.

After the normalisation of a parameter values is completed, it has to be adjusted to a normalised value of target/goal (if necessary), which is used as global

benchmark. A value for Ixi is derived from the inverse-logit function7, in which the adjusted normalised value is the argument. Because of nature of HIFI framework, actual or original values of all parameters are positive numbers including nil.

In other words, Ixi is calculated using following specification of the inverse-logit formula8:

, where

x’adj – adjusted (to the target) normalised value of a parameter.

7. The inverse logit function is this: 8. Asymptotic feathers of this specification of inverse-logit function

is show in the Annex (Figure 8.1).

3.2. DESCRIPTION OF TIPEE INDICATORS AND DATA SOURCES8

3.2.1 Selected elements of the Natural capital – CNC9

Natural capital is an approach to ecosystem valuation which revolves around the idea, in contrast to traditional economics, that non-human life produces essential resources. Thus their ecological health is essential to the sustainability of the economy. In other words, mis- or overexploitation of the natural capital threatens the health of ecosystems as well as human lives, due to degradation and pollution of the main means of life: air, water, land and forests.

9. See also “Politique énergétique et écodévelopment: Manuel d’accompagnement destiné aux planificateurs”, HELIO Intl. 2012.

From a sustainability perspective, extensive exploitation of the natural capital will result in an increase of greenhouse gas emissions, air pollution and loss of forest area that inevitably harm ecosystems. These indicators have been selected as they are associated to significant global sustainability threats.10 They are quite well integrated into international statistical systems and have wide cross-country coverage. A value for natural capital – CNC – is calculated as average of values of its indicators as shown below:

10. Rockstrom, J. et al. (2009). Planetary boundaries: exploring the safe operating space for humanity. Ecology and Society.

HIFI

5 forms of capital

24 TIPEEindicators

INDICATORS THAT REFLECT THE ELEMENTS OF A CLIMATE-RESILIENT

ENERGY POLICY LEADING TO ECODEVELOPMENT.

CONSTRUCTION OF HIFI

Equallyweightedaverage

FIGURE 3.2 CONSTRUCTION OF HIFI BASED ON TIPEE INDICATORS


INDICATOR N° 1: Greenhouse Gas Emissions – I’GHG A greenhouse gas is any gaseous compound in the atmosphere that is capable of absorbing infrared radiation, thereby trapping and holding heat in the atmosphere. By increasing the heat in the atmosphere, greenhouse gases are responsible for the greenhouse effect, which when forced ultimately leads to nefarious global warming. The most significant greenhouse gases are water vapour (H2O), carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O), according to the Environmental Protection Agency (EPA).

• Parameters For simplicity, carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) are considered as major greenhouse gases that are basically associated with increasing human activities.

Indicator Component Unit of measure

GHG emissions

CO2 emissions in energy sector

Metric tons per capita

Methane emissions in energy sector (CO2 equivalent)


Nitrous oxide emissions in energy sector (CO2 equivalent)


If data is not available for all three components, it would be just necessary to use data on CO2 emissions for which statistics across countries is relatively complete.11

• Data sources None of the available data sources can provide a complete set of data (i.e. covering all countries and year). Therefore data has to be obtained from different sources, with priority given to the most complete and reliable sources.

Source:

The World Bank (WB)

World Development Indicators: http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators

International Energy Agency (IEA)

www.iea.orgwww.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=90&pid=44&aid=8

United Nations (UN)

Monthly Bulletin of Statistics http://unstats.un.org/unsd/databases.htm

World Resources Institute’s Climate Analysis Indicators Tool (CAIT)

http://cait.wri.org/cait.php?page=yearly

11. The share that CO2 emissions are from total GHG emissions. Data for CO2 emissions are updated more frequently.

The sources should be prioritised in the following order: 1. WDI, 2. IEA, 3. UN.; 4. CAIT.

INDICATOR N° 2: Air pollution – IAP

Air pollution is another major area of concern that is directly linked with energy sector production, especially when it comes to coal and fuel combustion residuals. The air pollution indicator is basically measured by atmospheric particulate matter, which is also known as particulate matter (PM). It is a microscopic solid or liquid matter suspended in the Earth’s atmosphere. Sources of particulate matter can be man-made or natural. They have impacts on climate and precipitation that adversely affect human health. Subtypes of atmospheric particle matter include suspended particulate matter (SPM), respirable suspended particle (particles with diameter of 10 micrometres or less), fine particles (diameter of 2.5 micrometres or less), ultrafine particles, and soot.

• Parameter Because data for PM2.5 pollution are more available across countries, it is reasonable to use this measure:


Air pollution PM2.5 pollution Micrograms per cubic meter

• Data sources None of the available data sources provide a complete set of data (i.e. covering all countries and years). Therefore, data has to be obtained from different sources, with priority given to the most complete and reliable sources.

Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/EN.ATM.PM25.MC.M3

Socioeconomic data and applications enter (SEDAC)

http://sedac.ciesin.columbia.edu/data/set/sdei-global-annual-avg-pm2-5-2001-2010/data-download

World Health Organization (WHO)

http://www.who.int/mediacentre/factsheets/fs313/fr/index.html

The sources should be prioritised in the following order: 1. WDI, 2. SEDAC; 3. WHO.

INDICATOR N° 3: Deforestation (or loss of forest area) – ILFA

Deforestation is the removal of a forest or stand of trees where the land is thereafter converted to a non-forest use. Examples of deforestation include conversion of

http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators



www.iea.org

www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=90&pid=44&aid=8

www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=90&pid=44&aid=8

http://unstats.un.org/unsd/databases.htm

http://unstats.un.org/unsd/databases.htm



http://data.worldbank.org/indicator/EN.ATM.PM25.MC.M3

http://data.worldbank.org/indicator/EN.ATM.PM25.MC.M3




http://www.who.int/ mediacentre/factsheets/fs313/fr/index.html




forest land to farms, ranches, or urban use. Deforestation occurs for many reasons: trees are cut down to be used or sold as fuel (sometimes in the form of charcoal) or timber, while cleared land is used as pasture for livestock, plantations of commodities and settlements. The removal of trees without sufficient reforestation has resulted in damage to habitat, biodiversity loss and aridity. It has adverse impacts on biosequestration of atmospheric carbon dioxide.

• Parameter Change in forest area over a specified period of time is a main component of this indicator. Usually, the specified period is long enough to reflect variations in change in forest areas across countries. Most studies concern change in forest area since 1990. So, 1990 is base year to calculate the change in forest area.


Deforestation Forest area Square kilometers

• Data sources None of the available data sources can provide a complete set of data (i.e. covering all countries and years). Therefore, data has to be obtained from different sources, with priority given to the most complete and reliable sources.

Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/AG.LND.FRST.K2?page=4

Food and Agriculture Organization (FAO)

www.fao.org/forestry/46203/en/

United Nations (UN)

http://unstats.un.org/unsd/environment/forestarea.htm

World Resource Institute (WRI)

www.wri.org/our-work/topics/forests

The sources should be prioritised in the following order: 1. WDI, 2. FAO, 3. UNstat; 4. WRI.

3.2.2 Selected components of the Social capital – CSC

The central premise of social capital is that social institutions and networks have value. Social capital refers to the collective value of all “social networks” [who people know] and the inclinations that arise from these networks to do things for each other [“norms of reciprocity”]. The term social capital emphasises a wide variety of quite specific benefits that flow from the trust, reciprocity, information, and cooperation associated with social networks. Social capital creates value for the

people who are connected and, at least sometimes, for bystanders as well.

When it comes to sustainable energy investments, there is much evidence showing that higher social capital will lead to deeper penetration of renewable energy technologies into energy sector and contribute to more sustainable development. Comparing the current state of social capital in cross-country context, there are no specific indicators characterising specifically the energy sector. Nevertheless, for reasons of simplicity, the following indicators can be attributed to the social capital: informed consultation, citizen participation and balanced governance. A value for the social capital – CSC – is calculated as average of values of its indicators as shown below:

INDICATOR N° 4: Informed consultation – IIC

In most countries by law and practice there is a need to establish additional consultation requirements for projects with “potentially significant impacts” on local communities. In such instances, a company (which is investing into the energy sector) must conduct an Informed Consultation effort, building on the basic consultation process eventually leading to the cancellation of the project. The company is supposed to utilise the information gathered in this consultation to mitigate impacts if necessary, tailor its implementation, and identify appropriate mechanisms for the sharing of project benefits.

• Indicator and its parameterIt is quite difficult to find a comprehensive and complete list of parameters. The list presented below is just a suggestive list of parameters that have data for most of developing countries. When it comes to developed countries, complementary parameters from the OECD sustainable governance indicators are worthwhile to use. However, there will be an issue related to comparability between developed and developing countries.

Indicator Parameter Unit of measure

Informed consultation

Policies for social inclusion/equity cluster average

The indicator is assessed by experts using the Likert scale with six points (1=low to 6=high)

• Data sources None of the available data sources provide a complete set of data (i.e. covering all countries and years). Therefore, data has to be obtained from different sources, with priority given to the most complete and reliable sources.

http://data.worldbank.org/indicator/AG.LND.FRST.K2?page=4

http://data.worldbank.org/indicator/AG.LND.FRST.K2?page=4

www.fao.org/forestry/46203/en/



www.wri.org/our-work/topics/forests


Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/IQ.CPA.SOCI.XQ

National surveys Maybe available from national or regional organisations engaged in the monitoring of this area

Millénaire 3 www.millenaire3.com/Guide-methodologique-la-concertation-dans-lacon.122+M561cf28ce1d.0.html

The sources should be prioritised in the following order: 1. WDI, 2. National surveys; 3. Millénaire 3.

INDICATOR N° 5: Citizen participation – Ictp

Citizen participation is a process which provides private individuals an opportunity to influence public decisions and has long been a component of the democratic decision-making process. Public involvement is a mean to ensure that citizens have a direct voice in public decisions. It is particularly important to try and ensure women participation when it comes to energy sector since they usually are the energy services manager of the household.

• Indicator and its parameterIt is quite difficult to find a comprehensive and complete list of parameters. The list presented below is just a suggestive list of parameters where data is available for most developing countries. When it comes to developed countries, complementary parameters from the OECD sustainable governance indicators are worthwhile to use. However, there will be an issue related to comparability between developed and developing countries.


Citizen participation

Policies for gender equality



Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/IQ.CPA.GNDR.XQ


International network on gender and sustainable energy

http://energia.org/

The sources should be prioritised in the following order: 1. WDI, 2. National surveys; 3. Energia.

INDICATOR N° 6: Balanced governance – Ibg

Transparency, as a criterion of honest and balanced governance, implies openness, communication, and accountability. Transparency means operating in such a way that it is easy for others to see what actions are performed. It has been defined simply as the perceived quality of intentionally shared information from a sender. Moreover, it provides balanced representation of different stakeholders in the decision-making process, whether they are on the supply or demand side of the energy equation, both sides requiring equal means of participation .

• Indicator and its parameterIt is quite difficult to find a comprehensive and complete list of parameters. The one presented below is just a suggestive list of parameters that have data for most of developing countries. When it comes to developed countries, complementary parameters from the OECD sustainable governance indicators are worthwhile to use. However, there will be an issue related to comparability between developed and developing countries.


Balanced governance

Policies to promote citizen involvement, transparency, accountability, and preventing corruption in all sectors



http://data.worldbank.org/indicator/IQ.CPA.SOCI.XQ

http://data.worldbank.org/indicator/IQ.CPA.SOCI.XQ

www.millenaire3.com/Guide-methodologique-la-concertation-dans-lacon.122+M561cf28ce1d.0.html



http://data.worldbank.org/indicator/IQ.CPA.GNDR.XQ

http://data.worldbank.org/indicator/IQ.CPA.GNDR.XQ

http://energia.org/


Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/IQ.CPA.TRAN.XQ

Transparency international

Corruption perception index – CPIwww.transparency.org/cpi2014/results


Millénaire 3 www.millenaire3.com/Guide-methodologique-la-concertation-dans-lacon.122+M561cf28ce1d.0.html

The sources should be prioritised in the following order: 1. WDI, 2.CPI, 3. National surveys; 4. Millénaire 3.

3.2.3 Contribution to the Human capital – CHC

Conventionally, human capital is defined as a collection of resources—all the knowledge, talents, skills, abilities, health, experience, intelligence, training, judgment, empathy and wisdom possessed individually and collectively by individuals in a population. Most economists agree that human capital can be a more important determinant of its long term economic success than virtually any other resource. This resource must be invested in and leveraged efficiently in order for it to generate returns for the individuals involved as well as for an economy as a whole.

Although human capital plays a pivotal role in explaining productivity difference across countries, there is also a positive mutual relationship between developing human capital and boosting investments for sustainable energy. This interlinkage is best explained by the following indicators: access to electricity by households; local technical capacity and income control12.

INDICATOR N° 7: Access to electricity –IElA

Access to electricity is crucial to human well-being and to a country’s economic development. It is also essential for the provision of clean water, sanitation, education, healthcare and leisure and for the provision of reliable and efficient lighting, cooking, mechanical power, transport and telecommunications services.

12. This indicator is not well studied in developing countries and hence there is very little data coverage to include this in cross-country analysis.

• Parameter Access to electricity is the percentage of population with access to electricity.


Access to electricity

Access to electricity

Percentage of population with access to electricity


Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS


World Energy Outlook www.worldenergyoutlook.org/resources/energydevelopment/energyaccessdatabase/

International Renewable Energy Agency (IRENA)

www.irena.org/home/index.aspx?PriMenuID=12&mnu=Pri

World Resources Institute (WRI)

http://earthtrends.wri.org/searchable_db/index php?theme=6&variable_ID=351&action=select_countries

The sources should be prioritised in the following order: 1. WDI, 2. IEA, 3. IRENA; 4. WRI.

INDICATOR N° 8: Income control –IIncC

The energy sector accumulates a fair amount of income in developing countries. However, these revenues are not always used wisely and reinvested into sustainable energy technologies. Instead, hidden subsidies and fraud are widespread, which jeopardise perspectives of viable development for the energy sector. The amount of fraud in the energy sector varies from country to country. In order to fight fraudulent practices various measures of income control are used.

• Parameter Reduce taxable income.


Income control

Reduced taxable income

Percentage of energy revenues

• Data sources None of the available data sources can provide a complete

http://data.worldbank.org/indicator/IQ.CPA.TRAN.XQ

http://data.worldbank.org/indicator/IQ.CPA.TRAN.XQ

www.transparency.org/cpi2014/results

www.transparency.org/cpi2014/results




http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS

http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS

www.worldenergyoutlook.org/resources/energydevelopment/energyaccessdatabase/










set of data (i.e. covering all countries and years). Therefore, data has to be obtained from different sources, with priority given to the most complete and reliable sources.

Source:

Integrating Human Rights into the Anti-Corruption Agenda

www.ichrp.org

Transparency international

CPI Index: www.transparency.org/policy_research/surveys_indices/gcb/2013

National statistical agencies

http://unstats.un.org/unsd/methods/inter-natlinks/sd_natstat.asp

The sources should be prioritised in the following order: 1. ICHRC, 2. Transparency international, 3. International Business Agencies and National Statistical agencies.

INDICATOR N° 9: Local technical capacity – ILTC

Promoting sustainable energy investments in developing countries will likely trigger a debate about the technical and intellectual capacity at national/local level to maintain and support the innovative development of the energy sector. Relative distribution and availability of engineers and other skilled technicians certainly define the speed and pace of sustainable energy development across countries.

• Parameters Local technical capacity is a combination of research and development expenditure, technical staff pool and knowledge management.


Local technical capacity

Research and development expenditure

Percentage of GDP

Technical staff pool

University degrees in natural sciences and engineering for 2005-2014

Per million population

Knowledge management

Scientific and technical journal articles

Number of articles published by in-country authors


Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/IP.JRN.ARTC.SC

UNESCO www.unesco.org/new/en/education/resources/online-materials/databases/



The sources should be prioritised in the following order: 1. WDI, 2. UNESCO, 3. National statistics.

3.2.4 Selected elements of the Financial capital – CFC

Financial capital generally refers to accrued financial wealth that is used to start or maintain a business (and thus to create productive capital). Under a financial concept of capital, such as invested money or invested purchasing power, capital is synonymous with the net assets or equity of the entity. Under a physical concept of capital, such as operating capability, capital is regarded as the productive capacity of the entity based on, for example, units of output per day. Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power.

Financial capital/consideration plays quite important a role in boosting sustainable energy investment into a country. Contribution of the financial capital to the value of the sustainable energy index is based on values of following indicators: non-renewable energy imports, investment assets and others.

A value for natural capital – CFC – is calculated as average of values of its indicators as shown below:

INDICATOR N° 10: Insurance – IIns

Insurance plays an important role in sustainable energy investment decisions. Availability of domestic insurance policies that account for climate change-related damages is a positive sign for investment decisions. While insurance market is well established in developed countries, this financial intermediation service is less sophisticated in developing countries. This is a clear barrier to sustainable energy investments as well.

• Parameter It is quite difficult to find a comprehensive and complete

www.ichrp.org

www.transparency.org/policy_research/surveys_ indices/gcb/2013





http://data.worldbank.org/indicator/IP.JRN.ARTC.SC

http://data.worldbank.org/indicator/IP.JRN.ARTC.SC

www.unesco.org/new/en/education/resources/online-materials/databases/






list of parameters for this indicator. HELIO Int. has developed a specific scale that assess availability of insurance services in developing countries.


Insurance Availability of insurance service

Using HELIO Int. approach this parameter is assessed using a ordinal scale, in which 0-no insurance service and 3 – comprehensive insurance service


Source:



National, regional and international business associations and consulting firms

National trade and commerce associations, Arthur Andersen, Standard & Poor’s, Bloomberg and others

The sources should be prioritised in the following order: 1. National sources, 2. International and regional sources.

INDICATOR N° 11: Investment assets – IInA

Investment assets indicates the financial state and growth of the country. It spurs the economic growth and indicates the level of economic activity in a country. There is a positive correlation between investment assets and sustainable energy investments.

• Parameter Investment assets is defined as ration of domestic (national) savings to GDP.


Investment assets

Ration of domestic saving to GDP

Percentage


Source:

The World Bank (WB)

http://data.worldbank.org/indicator/NY.GNS.ICTR.ZS

UNSD http://unstats.un.org/unsd/snaama/Introduction.asp

International Monetary Fund (IMF)

imf.org



The sources should be prioritised in the following order: 1. WB, 2. UNSD; 3. IMF; 4. National statistical agencies.

INDICATOR N° 12: Household energy burden – Iheb

This indicator shows household expenditures for energy consumption relative to total household expenses. Energy consumption includes electricity power consumption and use of fuels. In many developing countries, households bear high cost for energy consumption. Reducing this burden could open an additional avenue for proportional increase of the households’ expenditures on education, health care and improving the quality of life. HELIO recommends that household energy burden should not be too high (ideally less than 5% of total expenses) in order to develop households’ attitude for favoring sustainable energy.

• Parameter Household expenses on energy consumption as a share of total expenditures.


Household energy burden

Ratio of energy expenses to total expenditures

Percentage


Source:

The World Bank (WB)

Household consumption surveys in developing countries



Practical Action http://practicalaction.org/energy

The sources should be prioritised in the following order: 1. WB, 2. National statistical agencies; 3. Practical Action.



http://unstats.un.org/unsd/snaama/Introduction.asp

http://unstats.un.org/unsd/snaama/Introduction.asp

imf.org





http://practicalaction.org/energy


INDICATOR N° 13: Mobilisation of renewable energy potential – IMREP

This indicator shows the proportion of total investments that go to deployment of modern, local renewable energy and energy efficiency technologies. The objective set by this indicator is to divert 95% of all investments to finance renewable energy and energy efficiency technologies. This target is set by HELIO based on broad goals set by Scandinavian countries.

• Parameter Share of renewable energy investments in total energy sector investments.


Mobilisation of renewable energy potential

Share of efficiency and renewable energy investments in total energy sector investments

Percentage


Source:

The World Bank (WB)

Structure investment in the energy sector: collection of working papers

UNSD http://unstats.un.org/unsd/ENVIRONMENT/datacollect.htm


www.iea.org



The World Factbook

www.cia.gov/library/publications/the-world-factbook/

The sources should be prioritised in the following order: 1. WB, 2. UNSD, 3. IEA, 4. National statistical agencies; 5. The World Factbook.

INDICATOR N° 14: Non-renewable energy imports – INREI

Net (non-renewable) energy imports are estimated as energy use minus production, both measured in oil equivalent. A negative value indicates that the country is a net exporter. Energy use refers to use of primary

energy before transformation to end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

• Parameters For reasons of simplicity, net (non-renewable) energy imports is considered as main parameter of this indicator.


Net (non-renewable) energy imports

Net (non-renewable) energy imports

% of energy use


Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/EG.IMP.CONS.ZS


www.iea.org



The World Factbook


The sources should be prioritised in the following order: 1. WDI, 2. IEA; 3. National statistical agencies; The World Factbook.

INDICATOR N° 15: Non-renewable energy reserves – INRER

With a view to meet future energy demand, it is important to understand the available reserves of non-renewable energy resources (mostly fossil fuels) and the limitations posed on them due to environmental considerations. This also has implications for energy security across countries. Countries rich in non-renewable energy depend on reserves in order to maintain their steady development and non-renewable energy importer countries need to maintain a minimum leverage in order to be ready for abrupt disruption of supply of energy resources. HELIO developed benchmarks for both types of countries in order to assess whether a country has reasonable level of non-renewable energy reserves.

http://unstats.un.org/unsd/ENVIRONMENT/datacollect.htm

http://unstats.un.org/unsd/ENVIRONMENT/datacollect.htm

www.iea.org





http://data.worldbank.org/indicator/EG.IMP.CONS.ZS

http://data.worldbank.org/indicator/EG.IMP.CONS.ZS

www.iea.org






• Parameter Number of days of stock of non-renewable energy supplies or number of years of exploration of proven reserves at the current rate.


Non-renewable energy reserves

Number of days of stock of non-renewable energy /Number of years of exploitation of proven reserves at the current rate

Days

Years


Source:


www.iea.org



The World Factbook


On-line statistical resources

For example: www.nationmaster.com/ http://knoema.com/

The sources should be prioritised in the following order: 1. IEA, 2. National statistical agencies, 3. The World Factbook, 4. Online statistical resources.

3.2.5 Selected components of the Produced capital – CPC

Produced capital consists of physical assets generated by applying human productive activities to natural capital and capable of providing a flow of goods or services. This comprises material goods or fixed assets which contribute to the production process rather than being the output itself – e.g. tools, machines and buildings.

Produced capital is important for a sustainable energy investments perspective in two ways. Firstly, the efficient use of produced capital enables a society to be flexible, innovative and increases the speed to market of its products and services. Secondly, produced capital and technology can be used to reduce resource use and enhance both efficiency and sustainability.

Contribution of the produced capital to the value of the sustainable energy index is based on values of following

indicators: level of deployment of modern renewable energy technologies, energy efficiency rate, quality of electricity supply, and others.

A value for natural capital – CPC – is calculated as average of values of its indicators as shown below:

INDICATOR N° 16: Level of deployment of modern renewable energy technologies – IMRET

Renewable energy is any energy source that is naturally replenished, like that derived from solar, wind, geothermal or hydroelectric action. Energy produced from the refining of biomass is also often classified as renewable. Coal, uranium, oil or natural gas, on the other hand, are finite sources. Global use of renewable energy is expected to grow in the future. HELIO estimates that the share of renewable energy in the energy mix should be as great as possible, accounting (as ambitious as it may seem) for 95% of total primary energy supply. In 1990 the aggregate world share of renewable energy in total gross energy inland consumption was less than 13%13. In 2013, the IEA says renewables accounted for 22% of global electricity generation14 2013.

• Parameters For simplicity, production of electricity by renewable energy sources is considered as main parameter of this indicator.


Renewable energy

Electricity production from renewable sources

Share in total electricity production, percentage


13. www.eea.europa.eu/data-and-maps/indicators/renewable-primary-energy-consumption/renewable-primary-energy-consumption-assessment-5

14. www.iea.org/aboutus/faqs/renewableenergy/

www.iea.org





www.nationmaster.com/ http://knoema.com/

www.nationmaster.com/ http://knoema.com/

www.eea.europa.eu/data-and-maps/indicators/renewable-primary-energy-consumption/renewable-primary-energy-consumption-assessment-5



www.iea.org/aboutus/faqs/renewableenergy/


Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/EG.ELC.RNWX.ZS


www.iea.org

UNSD http://unstats.un.org/unsd/ENVIRONMENT/Energy.htm

The sources should be prioritised in the following order: 1. WDI, 2. IEA, 3. UNSD.

INDICATOR N° 17: Energy efficiency – IEE

Energy efficiency is a way of managing and restraining the growth in energy use. Something is more energy efficient if it delivers more services for the same energy input, or the same services for less energy input. For example, when a compact florescent light (CFL) bulb uses less energy (one-third to one-fifth) than an incandescent bulb to produce the same amount of light, the CFL is considered to be more energy efficient. As a benchmark for improving energy efficiency, HELIO proposes to use the value, which amounts to 20% of energy intensity in 1990.

• Parameters For simplicity reason, only the parameter of GDP per unit of energy use is considered.


Energy efficiency

GDP per unit of energy use

Purchasing Power Parity USD per kg of oil equivalent

• Data sources None of the available data sources (could) provide a complete set of data (i.e. covering all countries and years). Therefore, data has to be obtained from different sources, with priority given to the most complete and reliable sources.

Source:

The World Bank (WB)

World Development Indicators: http://data.worldbank.org/indicator/EG.GDP.PUSE.KO.PP


www.iea.org

IMF www.imf.org/external/ns/cs.aspx?id=28

The sources should be prioritised in the following order: 1. WDI, 2. IEA, 3. IMF.

INDICATOR N° 18: Quality of electricity supply – IQES

The quality of the electricity supply determines the fitness of electricity to power consumer devices. Synchronisation of voltage frequency and phase allows electrical systems to function in their intended manner without significant loss of performance or life. The term is used to describe electric power that drives an electrical load and the load’s ability to function properly. Without the proper power, an electrical device (or load) may malfunction, fail prematurely or not operate at all. There are many ways in which electric power can be of poor quality and many more causes of such poor quality power.

• Parameters For reasons of simplicity, only the parameter on Quality of electricity supply chosen by the World Bank is considered.




The quality of electricity supply in a country (lack of interruptions and lack of voltage fluctuations) is (1 = worse than in most other countries, 7 = meets the highest standards in the world)


Source:

The World Bank (WB)

World Development Indicators: http://siteresources.worldbank.org/INTEXPCOMNET/Resources/2.05_Quality_of_Electricity_Supply.pdf


www.iea.org

International Conference on Renewable Energies and Power Quality

www.icrepq.com/

The sources should be prioritised in the following order: 1. WDI, 2. IEA, 3. ICREPQ.

http://data.worldbank.org/indicator/EG.ELC.RNWX.ZS

http://data.worldbank.org/indicator/EG.ELC.RNWX.ZS

www.iea.org

http://unstats.un.org/unsd/ENVIRONMENT/Energy.htm

http://unstats.un.org/unsd/ENVIRONMENT/Energy.htm

http://data.worldbank.org/indicator/EG.GDP.PUSE.KO.PP

http://data.worldbank.org/indicator/EG.GDP.PUSE.KO.PP

www.iea.org

www.imf.org/external/ns/cs.aspx?id=28

www.imf.org/external/ns/cs.aspx?id=28

http://siteresources.worldbank.org/INTEXPCOMNET/Resources/2.05_Quality_of_Electricity_Supply.pdf



www.iea.org

www.icrepq.com/


INDICATOR N° 19: Vulnerability of thermal power supply – IVTPS

Today, extreme weather events such as flooding and intense precipitation (snow and rain) are becoming more frequent and severe in some regions. Building thermal power plants and electricity infrastructure in areas prone to climate related threats adds to those growing risks. To ensure a reliable and affordable thermal power supply for decades to come, the thermal power sector needs to become more resilient in the face of these changes and also to adapt to growing risks. Energy efficiency and renewable energy can diversify thermal power supply and make it more resilient. But there is more to the picture. By investing in those options, carbon emissions could be dramatically cut, helping to curb further climate change.

• Parameters For reasons of simplicity, an estimate of possible power capacity threatened by flooding is consider as parameter.


Vulnerability of thermal power supply

Estimation of possible power capacity threatened by flooding

Percentage of total capacity of thermal power production


Source:



Global Energy Network Institute

www.geni.org/globalenergy/library/



The sources should be prioritised in the following order: 1. National Statistical Agencies, 2. GENI, 3. On-line statistical resources.

INDICATOR N° 20: Vulnerability of renewable power system – IVRPS

The Fukushima I nuclear accidents in Japan have brought new attention to how national energy systems are vulnerable to natural disasters, with climate change already bringing more weather and climate extremes.

These threats to existing energy systems provide a rationale for investing in renewable energy. Shifting to renewable energy can help us to meet the dual goals of reducing greenhouse gas emissions, thereby limiting future extreme weather and climate impacts, and ensuring reliable, timely, and cost-efficient delivery of energy. At the same time it is important to estimate how adverse conditions could effect on functioning of renewable power systems.

• Parameters For reasons of simplicity, qualitative assessment of possible response function is to be considered.


Vulnerability of renewable power system

Qualitative assessment of renewable power systems’ response to long-term weather change

On the scale level with values very good = 1; average = 0.5; and bad = 0


Source:







The sources should be prioritisedin the following order: 1. National Statistical Agencies, 2. GENI, 3. On-line statistical resources.

INDICATOR N° 21: Vulnerability of transmission lines – IVtl

The transmission network is the part of the power system of greatest concern because it is highly vulnerable to attack or other type of failure, and the consequences can be great. The lines themselves are essentially impossible to protect because they extend many thousands of miles, often in sparsely populated areas.

• Parameters For reasons of simplicity, qualitative assessment of vulnerability as a function of the length of high-voltage transmission lines.




www.nationmaster.com/

http://knoema.com/





http://knoema.com/




Qualitative assessment of vulnerability as a function of the length of high-voltage transmission lines


• Data sources None of the available data sources can provide a complete set of data (i.e. covering all countries and year). Therefore, data has to be obtained from different sources, with priority given to the most complete and reliable sources.

Source:







The sources should be prioritised in the following order: 1. National Statistical Agencies, 2. GENI, 3. On-line statistical resources.

INDICATOR N° 22: Scientific information – ISI

In order to ensure long-term resilience complete and full scientific information on possible risks related to natural disasters have to be available. This information may include emergency plans for natural disasters, availability of risk maps on flooding, desertification, contamination and others, risk control tools and measures for monitoring purposes.

• Parameters For reasons of simplicity, qualitative assessment of scientific information on possible risks related to natural disasters.



Qualitative assessment of scientific information on possible risks related to natural disasters



Source:



Specialised scientific expert groups

Professional associations



The sources should be prioritised in the following order: 1. National Statistical Agencies, 2. Specialised scientific groups, 3. On-line statistical resources.

INDICATOR N° 23: Siting guidance – ISG

Availability as well as high quality of guidelines for siting and zoning of industry and residential areas is very important to ensure that appropriate attention be given during the selection of a site to avoid or minimise environmental conflicts which would otherwise arise as a result of incompatibility in land use from sustainability perspective.

• Parameters For reasons of simplicity, qualitative assessment of availability as well as high technical quality of siting guidance.


Siting guidance

Qualitative assessment of availability as well as high technical quality of siting guidance







http://knoema.com/




http://knoema.com/


Source:







The sources should be prioritisedd in the following order: 1. National Statistical Agencies, 2. Specialised scientific groups, 3. On-line statistical resources.

INDICATOR N° 24: Crisis management – ICR

Significant global and local crisis events have highlighted the need for timely, coordinated, and tested crisis management programs in the energy sector. These programs, when properly designed and implemented, help ensure that damages caused by crises are mitigated due to effective execution of emergency plans and preventing fatalities and destruction of energy supply from alternative options.

• Parameters For reasons of simplicity, qualitative assessment of availability and quality of contingency plans for crisis management.


Crisis management

Assessment of availability and quality of contingency plans



Source:







The sources should be prioritised in the following order: 1. National Statistical Agencies, 2. Specialised scientific groups, 3. On-line statistical resources.




http://knoema.com/




http://knoema.com/


USING THE HELIO INDEX FOR INVESTORS (HIFI)

4.1. A COMPLETE HIFI TEST FOR TOGO AND CAMEROONThis part presents HIFI for two countries for which full set of data on 24 indicators of forms of capital were available.1 Table 4 .1 shows progress of some development indicators over last quarter century vis-à-vis HIFI.

Comparing development results for Cameroon and Togo over the last two and half decades, one can see that both countries have had almost the same rate of progress: life expectancy has increased by 1-2 years in both countries; income has been stagnant and even decreased a little bit for Togo; and population (and mean years of schooling of adults) has increased less than twofold. When it comes to the adjusted net saving, it seems that these countries’ some development outcomes were achieved but with important sacrifices

1. See Table 8.2. that present all 24 indicators and its parameters used in this exercise.

in terms of sustainability. Togo became unsustainable as measured by adjusted net saving, while Cameroon significantly reduced its level of sustainability. In 1990 adjusted net saving for Cameroon and Togo were 0.9% and 6.7% of GNI respectively. After 25 years, the adjusted net saving for Cameroon fell to -5.8% while for Togo it became negative to -15.6% of GNI.

Using HELIO index methodology, one can find that HIFI is smaller for Togo although relatively similar for the two countries. HIFI for Cameroon and Togo were found to be 0.32 and 0.28 respectively. This result is consistent with some of the similarities on development achievement of both countries, but with Togo having a weaker sustainability position.

1990 2014 1990 2014 1990 2014 1990 2014Cameroon 53.6 55.1 2655 2809 12.1 22.7 0.9 -5.8 0.32

Togo 55.9 56.5 1285 1207 3.8 7.1 6.7 -15.6 0.28

Life expectency at birth (years)

Income per capita (const.2011 PPP)

Population (mln. People)

Adjusted Net Saving (% of GNI) HIFI

COUNTRY NAME

Source: WDI 2015 (accessed October 15, 2015), HELIO International 2015.

TABLE 4.1 SOME DEVELOPMENT INDICATORS AND HIFI

4


0.05

.1.15

.2.25

.3.35

.4.45

.5.55

Financial Human Natural Produced Social

Values of Forms of Capital for Togo

0.05

.1.15

.2.25

.3.35

.4.45

.5.55

Financial Human Natural Produced Social

Values of Forms of Capital for Cameroon

Figure 4 .1 shows distribution of these indicators’ scores for Cameroon and Togo.

This figure shows the similarities between Togo and Cameroon across the HIFI. But it also highlights the areas in which there are some differences. Two of the areas in which Togo has worse performance than Cameroon are access to electricity and energy efficiency. These critical differences between the two countries are captured by the index and explain the lower value assigned to Togo.

The comparison of the performance of the different forms of capital shows that the only form of capital in which Togo has better values is social capital, while Cameroon presents a substantially higher stock of human capital, which more than compensates for any lower value of any other form of capital. The differences in the other forms of capital are relatively small. This is an alternative way to understand how the HIFI assign a higher (although not by much) value to Cameroon.

4.2. SCALING-UP IN THE USE OF HIFI AND GLOBAL REACHBuilding on successful examples of Togo and Cameroon, the next step is to encourage other countries to adopt HIFI based on TIPEE indicators. This is interesting because collecting data on qualitative indicators using TIPEE approach can only be accomplished at local level. Although some data on quantitative indicators across countries are available at international level, this only provides very limited perspective as shown in Figure 4 .3.

HIFI-10 has been constructed using the 10 quantitative indicators: GHG emission, Pollution, Deforestation, Electricity access, Income control, Local technical capacity, Renewable energy, Energy efficiency, Household

energy burden, Non-renewable energy import, Non-renewable energy reserves. Figure 4 .2 shows that correlation between HIFI-10 and income across 92 countries is positive and that the relationship across countries tends to be non-linear.

The positive slope of fitting line suggests that richer countries tend to have higher HIFI-10 values. However, these results may change and some more insight could be derived if ‘qualitative’ indicators were included accordingly.

FIGURE 4.2 VALUES OF FORMS OF CAPITAL FOR TOGO AND CAMEROON

FIGURE 4.1 TIPEE SCORES OF HIFI INDICATORS FOR TOGO AND CAMEROON

Greenhouse gas emissions (CO2)Major local energy pollutant

Deforestation

Electricity access

Income control

Local technicalcapacity

Informed consultation

Citizen participation

Balanced governance

Renewable energy

Energy efficiencyQuality of electricity supply

Vulnerability of thermalpower supply

Vulnerability ofrenewable power systems



Sitting guidelines

Crisis management

Householdenergy burden

Non-renewableenergy imports

Non-renewableenergy reserves

Investment assets

Mobilisation of renewableenergy potential

Insurance

.1

.3

.5

.7

1

Togo Cameroon





Adequate planning is an important component of the scaling-up HIFI process. HELIO identifies three key approaches to scaling-up:

• Planned expansion – expanding the number of countries it has pilot tested and shown to be successful (cases of Togo and Cameroon);

• Association – expanding HIFI coverage through common efforts and alliances acrossHELIO networks in different countries;

• Proliferation – implementing HIFI global ranking at once, with the support of strategic investors and high-level policy.

2

2. List of countries by HIFI ranking is shown in the attachment 4.

.3.4

.5.6

.7.8

HSEI

I-10

6 8 10 12Income (GNI per capita in log scale)

ARMAUS

AUT

AZE

BGDBLR

BELBEN BIH

BRA

BGR

KHMCMR

CHLCOL CRI

CIV

HRV

CZE

DNK

DOM

EGY

SLV

EST

FINFRA

DEU

GHA

GTM

HND

HUNIND

ISR

ITA

JAM

JPN

JOR

KEN

KOR

KGZ

LBNMKD MYS

MDA MAR

MOZ

NAM

NPL

NLD

NZL

NIC

NGA

NOR

PAK PRYPERPHL

PRT

ROM

RUS

SEN

SGPSVKSVN

ZAF

ESPLKA

TZA

THATGO

TURUKR

URY

ZMB

FIGURE 4.3 HIFI-10 AND INCOME BASED ON DATA FOR 20142


CONCLUSIONS

This report presents the primary motivation for and the methodology of the HELIO Index For Investors (HIFI) which is proposed as a tool that

allows investors to identify the best socially responsible investments. An application to two countries is also demonstrated.

The HIFI is concerned with the attractiveness of a country for energy investments as determined by its management of the range of capital assets related to energy markets . It classifies the main energy elements in terms of the five forms of capital, which are then equally weighted to derive the overall HIFI. The HELIO Index builds on the TIPEE methodology and covers many aspects that best favour long-term sustainability, hence ecodevelopment. The TIPEE Indicators relate to the five forms of capital, for each of which energy-relevant parameters have been selected. They allow a worldwide use and analysis of the factors of a country energy system as they relate to ecodevelopment . These factors have been widely studied and synthesised in the HELIO Index methodology.

The application of the HIFI methodology shows that HIFI has a smaller value for Togo although not by much compare to Cameroon. This result is consistent with some of the similarities on development achievement of both countries, but with Togo having a weaker sustainability position. When results are considered from the perspective of stock of capital, it is found that Togo has better values for social capital, while Cameroon has

substantially higher stock of human capital. The latter more than compensates any lower value of any other form of capital, explaining its relatively higher value for the HIFI.

Although there are important data limitations for a full global scale-up in use of HIFI. The results for a limited number of indicators (HIFI-10) constructed for 92 countries show that richer countries tend to have higher values of the HELIO index. However, from the analysis of Togo and Cameroon we can infer that other complex interactions may be operating in creating the main differences across countries in terms of their attractiveness for energy investments if ‘qualitative’ indicators were included accordingly.

The HIFI methodology is fully available today for advising at the country level . As we make progress on the measurement of key qualitative indicators, the usefulness of the HIFI will accordingly keep increasing over time . In the meantime, we rely of the expertise of local analysts to assess the proper value of those very valuable indicators .

5


BIBLIOGRAPHY

1. G-DAE Working Paper No. 03-07: Five Kinds of Capital: Useful Concepts for Sustainable Development, 2004

2. International Energy Agency (IEA). Capturing the Multiple Benefits of Energy Efficiency, 2014

3. International Energy Agency (IEA). Energy Efficiency Market Report, 2013

4. International Energy Agency (IEA). Renewable energy: medium – term market report 2015, 2015

5. International Energy Agency (IEA). World Energy Outlook, 2012

6. Jonathan M. Harris (2000). Basic Principles of Sustainable Development.

7. KAPSARC, (Tarek Atallah and Patrick Bean). Determinants of

energy productivity: A comparison of 39 countries, 2015

8. KAPSARC, Global shift: The energy productivity transformation, 2015

9. Newell, R.G., Jaffe, A.B., Stavins, R.N. (2006). The effects of economic and policy incentives on carbon mitigation technologies. Energy Economics 28 563- 578.

10. Rockstrom, J. et al. (2009). Planetary boundaries: exploring the safe operating space for humanity. Ecology and Society.

11. United Nations Economic Commission for Europe (UNECE). Conference of European Statisticians Recommendations on Measuring Sustainable Development, 2014

12. United Nations Environment Programme (UNEP). Toward a Green

Economy: Pathway to Sustainable Development and Poverty Eradication, 2011

13. United Nations Environment Programme (UNEP). Uncovering pathways towards an inclusive green economy: a summary for leaders, 2015

14. United Nations University – International Human Dimensions Programme (UNU-IHDP) and United Nations Environment Programme (UNEP). Inclusive Wealth Report 2014: Measuring progress toward sustainability, 2014

15. World Bank (WB). The Changing Wealth of Nations: Measuring Sustainable Development in the New Millenium, 2011

16. World Bank (WB). Where is the Wealth of Nations? Measuring Capital for the 21st Century, 2006

17. http://data.worldbank.org/indicator

18. http://global-climatescope.org/en/

19. http://lgdata.s3-website-us-east-1.amazonaws.com/docs/64/949577/ICRGEXTRACT_BUSGUIDE04.pdf

20. http://pages.uoregon.edu/rgp/PPPM613/class10theory.htm

21. http://rise.worldbank.org/reports

22. www.euromoneycountryrisk.com

23. www.ey.com/UK/en/Industries/Cleantech/Renewable-Energy-Country-Attractiveness-Index

24. www.helio-international.org/publication/energy-systems-in-cameroon-2009/

25. www.helio-international.org/publication/tipee-report-togo/

26. www.hks.harvard.edu/programs/saguaro/about-social-capital

27. www.livescience.com/37821-greenhouse-gases.html

28. www.paconsulting.com/industries/energy/access-to-energy-investment-map/

29. www.ssfindex.com/

30. https://en.wikipedia.org/

31. www.ethicalmarkets.com

32. www.greentransitionscoreboard.com

6

http://data.worldbank.org/indicator

http://data.worldbank.org/indicator

http://global-climatescope.org/en/

http://lgdata.s3-website-us-east-1.amazonaws.com/docs/64/949577/ICRGEXTRACT_BUSGUIDE04.pdf




http://pages.uoregon.edu/rgp/PPPM613/class10theory.htm

http://pages.uoregon.edu/rgp/PPPM613/class10theory.htm

http://rise.worldbank.org/reports

www.euromoneycountryrisk.com

www.ey.com/UK/en/Industries/Cleantech/Renewable-Energy-Country-Attractiveness-Index



www.helio-international.org/publication/energy-systems-in-cameroon-2009/



www.helio-international.org/publication/tipee-report-togo/

www.helio-international.org/publication/tipee-report-togo/

www.hks.harvard.edu/programs/saguaro/about-social-capital



www.livescience.com/37821-greenhouse-gases.html

www.livescience.com/37821-greenhouse-gases.html

www.paconsulting.com/industries/energy/access-to-energy-investment-map/



www.ssfindex.com/

https://en.wikipedia.org/

www.ethicalmarkets.com




1

The following four indexes can be highlighted as main sustainable energy indices predating HIFI:

1. The ClimateScope Index – explores and assesses the investment climate and policies for clean energy investments in 55 emerging markets in Africa, Asia, and in Latin America and the Caribbean.2 The index is developed by Bloomberg New Energy Finance and supported by the UK Department for International Development and the US Agency for International

1. Euromoney Country Risk, www.euromoneycountryrisk.com; International Country Risk Guide, http://lgdata.s3-website-us-east-1.amazonaws.com/docs/64/949577/ICRGEXTRACT_BUSGUIDE04.pdf.

2. http://global-climatescope.org/en/

Development. The index is heavily based on a vast amount of data, which cover both macro and micro level concerns related to clean energy investments decisions in developing counties.

2. The Renewable Energy Country Attractiveness (RECA) Index – focuses specifically on renewable energy technologies in developed and emerging countries.3 The index is developed by the Ernst & Young and highly focuses on the renewable energy sector. The index has limited but diverse country coverage.

3. Ernst & Young, “Renewable energy country attractiveness index,” www.ey.com/UK/en/Industries/Cleantech/Renewable-Energy-Country-Attractiveness-Index.

BRIEF OVERVIEW OF THE EXISTING INDEXES ON SUSTAINABLE ENERGY

Traditional indicators for investment primarily include financing costs (i.e., access to bank finance and capital markets, debt indicators, credit ratings, projected performance) and risk (i.e., political, market, technological, operational). The two most widely recognised indices on investment risk are Euromoney Country Risk and the International Country Risk Guide (ICRG), both of which include developing countries.1 In terms of investment specifically in energy projects, existing indices focus generally on these same elements, but they vary in scope.

7

www.euromoneycountryrisk.co




http://global-climatescope.org/en/




3. The PA Consulting Energy Investment Index – provides interactive map for visualising renewable and conventional energy development and use, which is available on-line.4 The index focuses on overviewing potential country risks associated with investments into different power generation technologies including renewables. The index includes 11 technologies and cover only 31 countries so far.

4. The Energy Development Index – helps to measure energy poverty and provides a rigorous analytical basis for policy-making. The index is developed by the International Energy Agency and is published in the IEA’s flagship report on World Energy Outlook. The index has wider coverage of developing countries.

The main advantages of HIFI over other existing index are that:

• it is founded on the Working Group on Statistics for

4. www.paconsulting.com/industries/energy/access-to-energy-investment-map/

Sustainable Development (WGSSD) framework5. In other words, HIFI is a tool that provides a multi-faceted view on sustainable energy investment covering such vital thematic areas as energy access, energy efficiency and renewable energy;

• it is going to cover most of the world’s countries, enabling rigorous comparisons on a global scale;

• it is focused on policies that are within the control of policy makers in the energy sector.

At the same time, HIFI is a much less micro data driven index than those presented in Table 8 .1. Also, HIFI doesn’t include measures of risk and other industry-specific elements that differentiate energy sector development from one country to the other. This is a point when HIFI can complement other similar index on sustainable energy.

5. United Nations Economic Commission for Europe (UNECE), Conference of European Statisticians Recommendations on Measuring Sustainable Development, 2014.

INDEX NAME ORGANISATION COUNTRIES COVERED

THEMATIC COVERAGE* UPDATING

Gen EA EE RE

ClimateScope Bloomberg 55 X Regular

Renewable Energy Country Attractiveness

Ernst & Young 40 X Regular

Energy investment index PA consulting 31 X X Regular

Energy development index IEA 80+ X Regular

HELIO INDEX FOR INVESTORS (HIFI)

HELIO International

X X X X Regular

* Gen = Energy sector in general; EA = Energy Access; EE = Energy Efficiency; RE = Renewable Energy

TABLE 7.1 SUSTAINABLE ENERGY INDICES PREDATING HIFI




ANNEXES

FIGURE 8.1 ASYMPTOTIC FEATURES OF INVERSE-LOGIT FUNCTION

.2.4

.6.8

1

-1 -.5 0 .5 1

0.2

.4.6

.8

-1 -.5 0 .5 1

INDICATORS TARGET (Y)

1 Greenhouse gas emissions 2/10 of the world average in 1990:

226 kg C per capita, or

829 kg CO2 per capita

2 Major local energy pollutant 1/10 of the value in 1990

3 Deforestation 2/10 of the value in 1990

4 Electricity access 100% of households

5 Local technical capacity 373 science and engineering graduates per million population

6 Renewable energy 95% primary energy supply

7 Energy efficiency 20% of global energy intensity in 1990: 77 toe / million U.S. $

8 Household energy burden 5% of expenditure of poor households

9 Non-renewable energy imports 0%

10 Non-renewable energy reserves net energy importer countries:

90 days

net energy exporter countries:

30 years

TABLE 8.1 HIFI-10 INDICATORS AND TARGETS

8


CAPITAL INDICATORS PARAMETERS

NaturalCNC

Greenhouse gas emissions Greenhouse gas emission (CO2) from the energy sector

Major local energy pollutant Concentration of hazardous maters in the air

Deforestation Number of hectares of deforestation or loss of forest vegetation (biodiversity) used for energy purposes

Human CHC

Electricity access Number of households that are electrified

Income control Reduction in the share of energy revenues that escape taxation

Local technical capacity Annual number of science and engineering graduates per total population

Social CSC

Informed consultation Public hearings and consultations on the impact assessments of proposed energy projects

Citizen participation Active participation of civil society (particularly women) in the energy sector

Balanced governance Balanced representation of energy demand and supply stakeholders as well as transparency in the decision-making process

Produced CPC

Renewable energy Deployment of modern, local renewable energy

Energy efficiency Energy intensity of industry; GHG emissions per unit of production; or energy intensity of the economy

Quality of electricity supply Length and recurrence of power cuts and variations in voltage

Vulnerability of thermal power supply Vulnerability of power plants (and refineries if applicable) to flooding

Vulnerability of renewable power systems Vulnerability of renewable energy systems to climatic variations


Length of transmission lines/distribution networks threatened by extreme weather events

Scientific information Availability of risk maps (flooding, desertification, contamination)

Sitting guidelines Climate-proofing guidelines for power plant siting and building

Crisis management Emergency plans for power plants

Financial CFC

Household energy burden Proportion of household income spent on energy services

Non-renewable energy imports External energy dependence

Non-renewable energy reserves Number of days of stock of non-renewable energy supplies

Investment assets Rate of domestic savings/GDP

Mobilisation of renewable energy potential

Proportion of national investment earmarked for renewable energy and energy efficiency

Insurance Availability of domestic insurance policies that account for climate change-related damages

TABLE 8.2 HIFI INDICATORS AND PARAMETERS


COUNTRY NAME HIFI-10 VALUE RANK

Germany 0.812 1

Denmark 0.778 2

Japan 0.743 3

Iceland 0.728 4

France 0.725 5

New Zealand 0.719 6

Switzerland 0.713 7

Ireland 0.712 8

Israel 0.705 9

Luxembourg 0.705 10

Norway 0.699 11

Finland 0.698 12

Chile 0.692 13

Poland 0.691 14

Colombia 0.690 15

Costa Rica 0.685 16

Sweden 0.676 17

Korea, Rep . 0.663 18

Brazil 0.656 19

Portugal 0.650 20

Uruguay 0.649 21

Austria 0.646 22

Italy 0.646 23

Turkey 0.637 24

El Salvador 0.635 25

Croatia 0.634 26

Nepal 0.632 27

Kenya 0.630 28

Sri Lanka 0.628 29

United Kingdom 0.626 30

Philippines 0.622 31


Kyrgyz Republic 0.621 32

Nicaragua 0.619 33

Guatemala 0.618 34

Moldova 0.613 35

Tanzania 0.612 36

Peru 0.611 37

India 0.611 38

Ukraine 0.610 39

Spain 0.609 40

Hungary 0.608 41

Latvia 0.605 42

Pakistan 0.603 43

Romania 0.602 44

Morocco 0.602 45

Zambia 0.595 46

Dominican Republic 0.592 47

Paraguay 0.590 48

Armenia 0.588 49

South Africa 0.585 50

Czech Republic 0.585 51

Ghana 0.572 52

Georgia 0.565 53

Tunisia 0.558 54

Greece 0.558 55

Australia 0.556 56

Belarus 0.554 57

Russian Federation 0.551 58

Egypt, Arab Rep . 0.542 59

Slovenia 0.541 60

Bangladesh 0.537 61


Bulgaria 0.534 62

Mozambique 0.532 63

Honduras 0.531 64

Netherlands 0.531 65

Thailand 0.528 66

Lithuania 0.527 67

Lebanon 0.521 68

Malaysia 0.519 69

Togo 0.516 70

Slovak Republic 0.513 71

Jordan 0.513 72

Macedonia, FYR 0.513 73

Singapore 0.511 74

Belgium 0.509 75

Cameroon 0.507 76

Cambodia 0.500 77

Bosnia and Herzegovina 0.497 78

Benin 0.489 79

Estonia 0.486 80

Cyprus 0.481 81

Algeria 0.477 82

Trinidad and Tobago 0.466 83

Namibia 0.453 84

Cote d'Ivoire 0.450 85

Jamaica 0.445 86

Senegal 0.443 87

Azerbaijan 0.435 88

Nigeria 0.413 89

Bahrain 0.384 90

Malta 0.380 91

Oman 0.328 92

TABLE 8.3 RANKING COUNTRIES BY HIFI-10


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