Despite the increase in sustainable energy initiatives by Multilateral Development Banks (MDBs), a limited number of loans financed by the World Bank, Inter-American Development Bank (IDB) and Asian Development Bank (ADB) consistently support sustainable energy investments in developing countries.

Investing in Sustainable Energy Futures: Multilateral Development Banks’ Investments in Energy Policy, a report released today by the World Resources Institute (WRI), analyzes energy-related loan programs at the World Bank, ADB and IDB in addition to the newly created Clean Technology Fund (CTF). The report is being launched this week at the annual spring meetings of the World Bank Group and the International Monetary Fund.

“Over the last five years, MDBs have engaged countries on critical elements of sustainable energy and have launched several specialized initiatives to promote clean energy and low carbon technologies,” said Athena Ballesteros, manager of WRI’s International Financial Flows and the Environment Project. “However, if the development banks are going to finance climate change solutions in the future, they need to help developing countries put in place new, and more effective forms of oversight, pricing, and investment incentives that promote long-term investments in sustainable energy.”

Ballesteros added, “In most countries, policies and regulations currently tend to emphasize short-term costs and supply rather than the long-term benefits of clean technologies.”

The report finds that despite increased support for low carbon energy technologies, many loan programs do not address aspects of electricity policy, regulation, institutional capacity and governance that would enable investments in sustainable energy over the long-term. The findings are based on a framework developed by WRI that builds on the Electricity Governance Indicator Toolkit—a set of indicators benchmarking best practice and promoting accountability in the electricity sector.

The report makes the case for systematic attention to the following issues:

- Long-term Integrated Electricity Planning
- Policies and Regulations Encouraging Energy Efficiency
- Policies and Regulations Promoting Renewable Energy
- Pricing Structures Encouraging Efficiency and Reducing consumption
- Subsidy Reform to Reveal the True Costs of Fossil Fuesls and Promote the Viability of Sustainable Energy Options
- Executive Agencies’ Capacity for Sustainable Electricity
- Regulators’ Capacity to Oversee Implementation of Sustainable Electricity Policy
- Utilities’ Capacity to Promote Energy Efficiency and Renewables
- Transparency of Policy, Planning, and Regulatory Processes for Electricity
- Stakeholders’ Engagement in Policy, Planning, and Regulatory Processes

A relatively small number of MDB projects address the elements of sustainable energy listed above. Of the 31 World Bank loans reviewed, only 10 consider 5 of the 11 elements. The IDB considers at least 5 of the elements in 10 of 19 loans and the ADB considers more than 5 elements in 10 of 29 projects.

The report also reviews the investments made by the MDB administered Climate Investment Funds (CIFs), particularly the $4.73 billion Clean Technology Fund. While the Funds address some of these elements, the research concludes attention to them has been uneven. The CIFs represent more public finance than has ever before been dedicated to climate change.

Smita Nakhooda, a senior associate at WRI, said “A greater focus on institutional capacity and governance will be key to supporting developing countries to pursue low carbon energy options that effectively meet development needs without compromising the poor.”

“Green” building retrofits or new construction can protect the Asian real estate sector from increasing environmental risks emerging in the region, according to a new report released by the World Resources Institute (WRI) and HSBC’s Climate Change Centre of Excellence.

The report, Surveying Risk, Building Opportunity, assesses the commercial building sector in India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam and the financial impacts it could face from energy insecurity, water scarcity and climate change. The report finds that green building investments can alleviate these risks in addition to achieving a positive return for building owners in a few years.

“The environmental challenges and resource constraints these countries have been experiencing will intensify and can result in increased utility, operating and construction costs for building owners,” said Shally Venugopal, an associate at WRI and lead author of the report. “Incorporating green features into design and construction can save real estate companies money, especially for energy use, and can increase occupancy rates and even rent premiums.”

According to the report, electricity prices are expected to increase as demand continues to rise, particularly in cities with weak electricity infrastructure. Most of the energy used by commercial buildings in the region goes toward air conditioning and lighting. In India, for example, lighting accounts for 60 percent of the energy used in commercial buildings while 32 percent goes toward air conditioning.

The region’s water constraints will also cause utility costs to rise. India, in particular, faces severe water availability and quality constraints in many areas. One estimate by the World Bank suggests that India will exhaust all available freshwater supplies by 2050.

The other focus countries will see localized water scarcity near major cities due to population growth and changing rainfall patterns. In Vietnam, the amount of freshwater consumed has tripled and in Malaysia and India it has doubled in the last two decades. This will not only lead to increasing water costs but will also affect the electricity grid since power generation depends heavily on water resources.

Major Indian cities already see power outages weekly. During peak season, Bangalore loses power an average of 1.5 hours a day while Kanpur loses power an average of 7 hours a day. In addition to losing power, the price of electricity will also increase.

As part of the study, HSBC’s analysts conducted a case study on the Indian real estate sector and the materiality of environmental factors. They found that for a typical commercial building (300,000 square feet) in Mumbai, a 1 percent increase in electricity costs could increase annual operating costs by approximately Rs 2.8 million, or around USD 60,000.

Building owners could protect themselves from energy price hikes by investing in energy efficient lighting, such as targeted task lighting, that could reduce energy demand by 20 to 25 percent. HSBC estimates that a 10 percent increase in energy costs would only increase operating costs in a green building by as little as only half as much compared to a typical building.

As the region sees increased rains, flooding, storms and landslides, weather-related insurance premiums for buildings could also increase. Jakarta, where 40 percent of land is below sea level, is especially vulnerable. Flooding in 2007 caused building insurance premiums to increase by 25 percent in 2008.

Building owners can protect themselves from damage caused by extreme weather events by examining climate risks for prospective sites even before purchasing land. Buildings can be designed to minimize damage from floods and storms by incorporating features such as flood vents and barriers, water-resistant flooring (e.g., tiles versus carpeting), and landscaping and exterior features that incorporate storm water management (e.g. rain gardens).

“Green buildings can protect investors from volatile and increasing power prices,” said Nick Robins, head of HSBC’s Climate Change Centre of Excellence. Roshan Padamadan, a HSBC analyst at the Centre, said “Our analysis shows that the upfront investment can payoff in as little as 3 years.”

Though green buildings are gaining momentum in the region, barriers to growth exist, such as the availability of local green building materials and expertise. The report recommends that governments create appropriate market incentives and institute stricter building codes to enable the green building movement to flourish in South and Southeast Asia.

This is the last report in a three-part series. Weeding Risk, the first report, analyzes environmental trends on the food and beverage sector in South and Southeast Asia. The second report, Over Heating, analyzes the power sector in the region.

Environmental trends could have significant financial repercussions for the $40 billion food and beverage industry in South and Southeast Asia, according to a report released today by the World Resources Institute (WRI) and HSBC’s Climate Change Centre of Excellence.

“The food and beverage industry is particularly vulnerable to climate change and water scarcity in Asia. The region is already struggling with increased water demand because of population and economic growth,” said Dana Krechowicz, a WRI associate and co-author of the report.

The industry’s dependence on agriculture, aquaculture and water resources for business operations makes it particularly susceptible in a region where climate change is projected to severely intensify water scarcity problems.

WRI’s report, Weeding Risk, examines the impacts these growing trends will have on seven economically important food and beverage sub-sectors in six countries – India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

The report’s findings suggest that the edible oils, starches, and sugar sub-sectors will be most vulnerable to increasing agricultural prices, while aquaculture, poultry, and dairy will be vulnerable to disease and contamination. As part of the study, HSBC’s analysis on an Indian sugar company shows that a sugarcane price increase of 1 percent can lead to a decline in profit of up to 10 percent.

The risks identified in the report are already affecting some food and beverage sectors. Drought during the monsoon season in India caused sugar prices to reach a 28-year high in 2009. This is particularly troubling considering experts estimate that by 2020, the demand for water in India will exceed all its sources of supply.

“Water stress is set to have a growing role in shaping the sector,” said Nick Robins, head of the Climate Change Centre of Excellence at HSBC. Roshan Padamadan, a HSBC analyst at the Centre stated, “The strategic choices made by a company along its value chain can mitigate these risks, making it important for investors to understand its sourcing, inventory, and operational performance.”

Weeding Risk is the first report in a three-part series. The second report, Over Heating, analyzes the power sector in South and Southeast Asia. Surveying Risk, Building Opportunity, assesses the environmental risks to commercial real estate in the region.

More than half of existing and planned power plants in South and Southeast Asia are located in areas currently considered water scarce or stressed, according to findings in a report released today by the World Resources Institute (WRI) and HSBC’s Climate Change Centre of Excellence.

The new report, Over Heating: Financial Risks from Water Constraints on Power Generation, analyzes water-related risks facing thermal and hydroelectric power plants in India, Malaysia, the Philippines, Thailand and Vietnam. These plants require large amounts of water for cooling and generation.

WRI mapped the water stress level across the region and the location of more than 150 existing and planned facilities of the largest power-generation companies in the region. The analysis found that water shortages pose the highest risk for power generation companies in India.

“Water-related risks are hard to quantify, yet they present a growing risk to power generation,” said Piet Klop, acting director of WRI’s Markets and Enterprise Program. “The next step is to take our analysis to specific companies and their exposure and response to those risks. On the upside, investors have investment opportunities that can come from better understanding water-related risks.”

In India, approximately 62 percent of existing and 79 percent of planned thermal and hydroelectric power plants of the three largest power generation companies (NTPC, Tata Power, and Reliance Infrastructure) are located in water scarce or stressed areas. The country’s water demand is expected to outgrow supply by 50 percent by 2030 and estimates by the World Bank indicate that all available water supplies will be exhausted by 2050.

“The power sector investors and analysts are making long-term bets on water that, in the future, might no longer be reliable,” said Amanda Sauer, a senior associate at WRI. “They need to start assessing their exposure to water-related risks when considering long-term investment strategies.”

The report’s findings suggest that project delays due to water-permitting problems and general shortages may be costly. As part of the study, HSBC’s analysts found that a 12-month delay in commercial operation could lower the rate of return on investment by 1.5 percent. Furthermore, each 5 percent drop in power production due to water shortages could result in nearly a 0.75 percent drop in the project’s rate of return.

“The projected expansion of power generation - whether coal, hydro or gas – is exposed to growing water stress,” said Nick Robins, head of the Climate Change Centre of Excellence (C3E) at HSBC.

Roshan Padamadan, a HSBC analyst at the Centre said, “Investors need to understand how companies are managing these risks, including the specific steps to optimize water use at the plant level.”

Over heating is the second report in a three-part series. The first report, Weeding Risk, looks at climate change and water scarcity impacts on the food and beverage sector in India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. The third report, Surveying Risk, Building Opportunity, assesses environmental risks to commercial real estate in the region.

China is making progress toward controlling greenhouse gas emissions, according to new research by the Word Resources Institute (WRI).

“In the last five years, Chinese leaders have embarked on policies to increase energy efficiency, using targets, quotas and a few taxes,” said Deborah Seligsohn and lead author of China, the United States, and the Climate Challenge. “While these policies may not provide the environmental certainty of a cap-and-trade system, our analysis shows they can control emissions and may be more suited to the current state of development of China’s financial markets and regulatory structure.”

China’s approach is founded on two main targets: reducing national energy intensity by 20 percent by the end of 2010 and to increasing renewable energy’s share of the national energy mix to 15 percent by 2020.

WRI’s analysis finds that China is on track to meet these two ambitious goals by enacting a broad range of measures. Chinese leaders have recognized that reducing energy intensity-the amount of energy used per unit of GDP-and expanding its energy portfolio improves energy security and air quality, as well as limiting greenhouse gas emissions.

“In 1979, China’s reform and opening policy began with a saying by Deng Xiaoping, ‘It doesn’t matter whether the cat is white or black as long as it eats mice.’ That also holds true for world efforts to control dangerous climate gases,” said Seligsohn. "Countries will use different approaches suitable to their particular circumstances.”

One key program, for instance, requires 1,000 of China’s largest state-owned enterprises to implement comprehensive reductions in energy intensity, and monitors their progress. This “Top 1,000 Enterprises Program” met its goals in the first year and exceeded its targets in 2007.

Another policy is to shut down small-scale inefficient facilities. In 2007, China closed 1,000 cement plants with a combined capacity of 50 million tons, 14.4 GW worth of small power plants, and plants producing 35 million metric tons of steel.In the electricity sector, China has steadily improved the efficiency of its power plants, and the government now requires all new coal-fired power plants to be state-of-the-art commercially available technology.

WRI’s analysis shows that the average efficiency of coal-fired plants is now higher in China than in the United States. China is also on pace to meet very ambitious renewable-energy goals. Installation of new wind power capacity since 2006 has consistently exceeded targets. By 2010, China will have at least 10GW of installed wind power capacity, rising to an expected 150 GW in 2020 - five times the current U.S. level. China’s solar reliance is also growing rapidly: ten percent of Chinese homes have solar water heaters and the number is growing at 20 percent per year.

“WRI’s research shows that China is making substantial progress in controlling its emissions of climate gases, and in monitoring emissions by major companies,” said Seligsohn. “The challenge for U.S.-China collaboration in climate change mitigation is for each country to understand the other’s approaches, and to find creative solutions when those approaches don’t align.”

The report suggests the U.S. could selectively issue free carbon allocations to protect some firms from overseas competitors that enjoy a lower carbon price. Carefully targeted measures can address differences in carbon policies without threatening global trade.

The low-carbon diet is a growing trend in the sports and entertainment industries, where Fox TV’s 24 and pro basketball’s Los Angeles Clippers are using the Greenhouse Gas Protocol to cut their climate calories.

“Our goals are to fully understand our carbon and energy impact, to reduce that impact significantly, and inspire our employees to take action on this issue in their business and personal lives,” said Rachel Webber from News Corporation, the parent company of Twentieth Century Fox Television, which produces 24. “We have just begun this effort, and we hope it encourages others in the industry to do the same.”

“The GHG Protocol is considered the standard international accounting tool for government and business leaders to measure and manage corporate greenhouse gas emissions,” said Pankaj Bhatia, director of the GHG Protocol at the World Resources Institute (WRI). The GHG Protocol was established in 1998 by WRI and the World Business Council for Sustainable Development.

Bhatia added, “It’s thrilling to see the application of our GHG Protocol in the sports and entertainment sectors, and in television shows like 24.”

When the producers of 24, starring Kiefer Sutherland, started using the GHG Protocol to calculate emissions, they found the largest sources originated from vehicles, special effects, and onsite generators. By changing some of the production practices, such as switching to biodiesel and hybrid cars, emissions were reduced by 43 percent.

The show’s environmental commitment is part of News Corporation’s global energy initiative to address its impact on climate change and lower the energy use of its businesses.

The sports industry is also striving to reduce emissions. The Los Angeles Clippers have teamed up with BeGreen, whose carbon offset methodologies are based on the GHG Protocol. To raise awareness of Earth Day 2009, the Clippers used a portion of their ticket sales from the game that day to reduce emissions from fan travel to and from the game and electricity usage at the Staples Center.

Also planning to use the GHG Protocol is Vancouver’s Olympic organizing committee. They hope to offset up to 300,000 tons of carbon dioxide emissions from the games – equal to the annual emissions from 50,000 European homes.

Since the publication of the first edition of The Greenhouse Gas Protocol: A Corporate Accounting and Standard in 2001, more than 1,000 businesses and organizations worldwide are using the GHG Protocol, including some of the world’s largest companies. The 2007 Corporate Climate Communications Report of the Fortune 500 companies by CoporateRegister.com reported that 63 percent of those companies use the GHG Protocol.

Other companies from various industries using the GHG Protocol include Target, Ikea, Unilever, Gap, Shell, Caterpillar, Marriott, Starbucks, General Electric, BP, IBM, VW, Bank of America, Timberland, Sony, Nike, 3M, Ford, Alcoa, Frito Lay, Staples, Xerox, Astra Zeneca and Wal-Mart.

Concentrating solar thermal (CST), a renewable energy technology that can provide electricity around-the-clock, has the potential to replace traditional fossil fuel-based power sources and become a central part of the U.S. power supply.

“Now, while Congress works on climate and energy legislation, is a good time to focus on CST and what is needed to fully realize the potential of this attractive renewable energy option,” said Britt Staley, the lead author of a new report by the World Resources Institute (WRI). “State and federal support for developing renewable energy sources and increased federal oversight of the transmission grid are needed.”

The authors of Juice from Concentrate argue that CST is different from many renewable energy technologies that provide power intermittently. When combined with thermal storage, CST can generate electricity on demand, not just when the sun is shining. It can also be integrated with other kinds of backup power.

Electricity from other renewable sources can be stored in batteries, but these are inefficient and expensive. CST power can be stored as heat in tanks - like coffee in a thermos - and used to produce electricity when needed. CST’s ability to provide electricity on demand and around-the-clock could enable utilities to meet baseload power instead of relying on coal-fired power plants.

If CST displaced new coal plants built in the United States today until 2030, carbon dioxide emissions could be reduced by 5 billion tons cumulatively - offsetting the annual emissions from electricity consumption of 35 million homes over that period.

“Even though there are 9,000 megawatts on the drawing board worldwide, several barriers exist to solar thermal power development,” Staley said. “Up-front investment for CST is high compared to that associated with coal plants. Federal and state policy support can help bring down costs over time to make CST competitive with coal.”

For instance, a 30 percent Investment Tax Credit for CST projects constructed before 2017 has helped spur investment in the U.S. Generous feed-in-tariffs have supported development in Spain, where electric utilities are obligated to purchase solar thermal power at a fixed, above-wholesale price for the electricity.

Water usage is another barrier highlighted in the report. One CST plant uses roughly the same amount of water per kilowatt hour of output as a coal plant. This can create a problem in arid regions, such as the Southwest U.S., where solar conditions are favorable, but water resources are scarce.

“Alternative cooling systems are available and can reduce water requirements, but these systems can increase project costs,” Staley added. “Creating investment incentives for plants to incorporate these technologies will be important to the long-term sustainability of CST.”

Truly taking advantage of CST’s potential will mean building a more complete infrastructure to bring power from sunny deserts to urban centers. The authors suggest that greater federal oversight of the electricity grid and improved coordination between grid operators are necessary.

Climate experts at the World Resources Institute (WRI) applaud the six Midwestern governors and Manitoban premier who have released today recommendations for a regional cap-and-trade program to reduce greenhouse gas emissions.

“The Midwestern governors recognize the need to tackle climate change while simultaneously growing the economy,” said Franz Litz, senior fellow at WRI who advised the region. “In the absence of federal climate legislation, regional partnerships are vital to reducing greenhouse gas emissions, spurring energy innovations, and creating green jobs.”

Signed by the governors of Illinois, Iowa, Kansas, Michigan, Minnesota and Wisconsin and the premiere of Manitoba, Canada, the recommendations are the result of an 18-month process that began in 2007 when the governors formed the Midwestern Greenhouse Gas Reduction Accord.

Following other regional carbon-trading agreements in the western and northeastern U.S., this is the first to address the unique climate challenges faced in America’s heartland.

In the Northeast, the Regional Greenhouse Gas Initiative (RGGI) caps carbon-dioxide emissions from large electric utilities in 10 eastern states with a goal of reducing emissions by 10 percent by 2018. The Western Climate Initiative (WCI) is a cap-and-trade program covering various industries in seven western states and four Canadian provinces. WCI released its design last fall.

The Midwestern program’s design will focus on promoting carbon sequestration through good agricultural practices, investment in carbon capture and storage, and energy efficiency.

“If a cap-and-trade program can work for the midwestern, northeastern and western regions, it can also work for the entire country. These agreements should form the basis of a federal greenhouse gas emissions market under the Obama administration,” Litz said. “WRI’s climate policy experts will continue to work with both state governments and federal policy makers to develop a program design that works nationwide.”

The governors of Indiana, Ohio, South Dakota and the premier of Ontario will observe the recommendations for now.

WHAT:

The Center for Sustainable Transport in Brazil (CTS-Brasil), a member of the World Resources Institute’s EMBARQ Network, the National Confederation of Transport, and the British Embassy will host the 2009 Brazil National Summit on Transport and the Environment. About 60 representatives from government, the private sector and the public will attend the one-day event focusing on policies aimed at reducing carbon emissions from the urban transport sector in Brazil.

WHEN:

Thursday, May 28, 2009
9:00 a.m. to 6:00 p.m.

WHERE:

Headquarters of the National Confederation of Transport (CNT)
SAS, Quadra 1, Bloco J
Brasilia - DF BRAZIL

WHO:

Luis Antonio Lindau, director, CTS-Brasil
Rejane D. Fernandes, communications coordinator, CTS-Brasil
Marilei Menezes, special projects coordinator, National Confederation of Transport
Patricia Boson, environment consultant, National Confederation of Transport
Luiz Andrade, climate change program manager, British Embassy
Raissa Ferreira, support officer of climate change program, British Embassy

WHY:

The goals and policy recommendations developed at the summit will be submitted to the federal government when Brazil’s National Plan on Climate Change comes up for revision in 2010.

Stressed water supplies in the Southeast United States could be relieved by introducing energy and water conservation policies outlined in a report released today by the World Resources Institute, Southface and Southeast Energy Efficiency Alliance.

Freshwater in the Southeast U.S. The above chart, based on U.S. Geological Survey data, shows that about 65 percent, or nearly 40 billion gallons, of water is withdrawn each day for thermoelectric power in the Southeast United States. Water and Watts, the third report in a three-part series about energy issues in the region, notes that approximately two out of every three gallons of freshwater withdrawn in the Southeast U.S. are sent to thermoelectric power plants, which are mostly coal-fired and nuclear. These plants require about 40 billion gallons of freshwater each day - nearly equal to the total daily freshwater withdrawals required to meet public supply needs for the entire U.S.

“Reducing electricity demands is not only critical to addressing our energy challenges, but also to meeting regional water needs,” said Ben Taube, executive director at the Southeast Energy Efficiency Alliance and a co-author of the new report. “Lawmakers at the federal, state, and local levels should consider policies that create incentives for the efficient use of both water and energy, especially in light of recent droughts.”

Water availability has become a more common source of conflict between states in the region. Alabama, Florida, and Georgia have fought over control of the Apalachicola/Chattahoochee/Flint River Basin and similar issues arose in North and South Carolina over the Catawba River.

Looking ahead, population growth in the Southeast could lead to a 30 percent increase in thermoelectric power generation by 2025. Without policy action to encourage efficiency and water-efficient power production, this higher electricity demand could further exacerbate water scarcity problems.

“Building more thermoelectric power plants that run on nuclear and coal is simply not sustainable,” said Dennis Creech, executive director at Southface, another report co-author. “Fortunately, we see that efficiency upgrades and conservation efforts can reduce demands on both energy and water resources, while saving consumers money on utility bills.”

The report notes that the average household in the region is spending about $250 each year on energy to heat the water they use for dishwashers, clothes washers, showers, and other needs. Upgrading just half the households in the Southeast with WaterSense labeled faucets or faucet aerators, for one example, could save residents an estimated $40 million on their water bills and another $80 million on their energy bills.

Any water efficiency improvements also help reduce demands on city water and wastewater treatment facilities. The energy needed to operate these facilities can amount to as much as 30 percent of a city’s total energy bill.

“These relationships between energy and water should not be overlooked in the Southeast,” said Eliot Metzger, an energy expert at WRI and co-author of the report. “Policymakers should take steps to promote water and energy savings, starting with near-term actions that make good economic and environmental sense.”

Policy and investment opportunities highlighted in the report focus on realizing both energy and water benefits. To start, state regulators must evaluate the impacts of new electric power supplies upon water, and prioritize options, including efficiency, with minimal or no water requirements.

Strong leadership is also needed with energy and water efficiency requirements for public buildings. Several states - including Alabama, Florida, North Carolina, and Virginia - have policies that encourage efficiency in state buildings. Additional policies and procurement guidelines for high efficiency products, like those bearing the ENERGY STAR logo or the U.S. EPA’s WaterSense label, can lead to additional energy, water and cost savings.

Financial incentives can help promote options like solar water heaters, which use heat from the sun to provide 40 to 80 percent of water heating needs. These systems can save homeowners $150 or more in energy costs each year. State tax incentives and additional federal tax credits can help encourage more homeowners to install solar hot water systems.

Finally, states and utilities can also lead information and awareness campaigns to help educate homeowners and businesses about the connections between energy and water use.

Energy efficiency policies in the Southeast U.S. can help reduce electricity use by more than 10 percent over the next six years - saving the same amount of power generated by more than 30 coal-fired power plants, according to a report released today by the World Resources Institute (WRI), the Southeast Energy Efficiency Alliance (SEEA), and Southface.

Projected Southeast Electricity Consumption This chart shows near-term energy efficiency potential in the Southeast, compared to DOE projections for electricity consumption through 2015. The region can save more than 10 percent of total electricity use, which amounts to 80 percent of the expected growth in demand over that period.

“Most buildings in the Southeast needlessly waste energy,” said Dennis Creech, a co-author of the report and executive director at Southface. “Though our region has shown progress in recent years, there remains immense potential to make homes and businesses more energy efficient. Our analyses in Georgia suggest that a 1 percent annual improvement in efficiency would save households $700 million over the next decade with lower electricity and natural gas bills.”

According to Power of Efficiency, the second report in a three-part series about energy opportunities in the Southeast United States, energy efficiency savings can be captured in the near future with prompt policy action by states. For instance, updating and enforcing energy codes for residential and commercial buildings will save consumers money and drastically reduce energy demands.

“Immediate investment in energy efficiency can pay significant dividends for years to come,” according to Ben Taube, a co-author and executive director at SEEA. “Our core mission and efforts show that a regional focus on efficiency will help meet future electricity needs, enhance our economy, and protect the environment.”

Several examples from the region offer good starting points for broader efficiency efforts. One example noted in the report is a program in Virginia that offers a tax credit for developers who construct high-efficiency buildings for low-income residents. Data and billing information showed that these residents reduced their energy costs by more than 25 percent and saved an average of 15 percent on total monthly utility bills.

The authors found that tax credits, loan programs or other financial incentives that reward both utilities and consumers for energy savings are some of the best methods to relieve initial cost hurdles and provide long-term economic savings.

The report notes that a national energy savings target would help accelerate action, citing a recent analysis by the American Council for an Energy-Efficient Economy that shows projected impacts of a federal Energy Efficiency Resource Standard. Such a policy could create more than 50,000 new jobs across the region and save consumers nearly $40 billion over the next 10 years.

“Southeast states have a huge opportunity with energy efficiency,” said Eliot Metzger, an energy expert at WRI and also a co-author of the series of reports. “It’s the cleanest, cheapest energy option on the table and abundant throughout the region.”

More than 25 percent of the Southeast U.S. region’s electric power could come from locally-available renewable energy supplies by 2025, according to findings released today by the World Resources Institute (WRI), Southern Alliance for Clean Energy (SACE), and Southface.

State-by-state renewable energy potential, as a percentage of 2006 total electric power salesPrompt policy action to develop these resources can also create tens of thousands of new jobs, attract more regional energy investment, and help protect regional air and water resources.

“The Southeast has a strong portfolio of renewable energy resources that offers several economic and environmental advantages over traditional electric power generation,” said Eliot Metzger, a project manager at WRI and an author of Local Clean Power, the first in a three-part series of reports about energy opportunities in the Southeast United States.

The report estimates that investments in local renewable energy resources - like biomass, solar, wind, and hydropower - can meet more than a quarter of future electricity needs in the region by 2025. That amount would be sufficient to meet national renewable energy targets currently being discussed as part of upcoming federal energy legislation.

The expansion of current renewable power production from its current level of about five percent will be a critical step towards meeting future electricity needs with cleaner supplies and increasing energy independence.

Stephen Smith, executive director at SACE, another research partner, added, “Right now we are depending on other regions of the country, and foreign countries like Columbia and Venezuela, to supply us with coal. Doesn’t it make more sense to be producing cleaner power, closer to home? Our research suggests we certainly have sufficient resources. It’s just a matter of recognizing and capitalizing on these home-grown energy supplies.”

Renewable power potential is well distributed throughout the region, though differences in total electricity sales mean that states like Mississippi and Alabama can meet much more than 25 percent of electricity needs with renewable resources (see table). Some electric power utilities are starting to develop renewable resources in the region, but additional policy action is needed to drive investment and carefully manage the transition to new energy resources.

“A focus on developing our own renewable energy resources will create good-paying jobs that cannot be exported from our region,” said Dennis Creech, executive director at Southface, which was a partner on this research. “However, we need public policy to remove market barriers and encourage these investments in the Southeast.”

“Additional policy action and investment in a clean energy future translates to new growth opportunities - which for us means the creation of more jobs,” noted Tim Blackwell, president of OneWorld Sustainable, a company specializing in efficiency and renewable energy in the Southeast.

The report offers several recommendations for policies that can advance renewable energy development in the region, including: firm targets for renewable power production; flexible incentives to advance local investments in renewable resources; and comprehensive state-level resource assessments, economic analyses, and regulatory guidance to integrate renewable power into the electricity grid.

Natural-resources extractive companies are profiting financially and socially when they consult with affected communities before and during the construction of projects.

“Rio Tinto and De Beers, for example, have negotiated agreements with communities to avoid harm and provide benefits. In so doing, they have gained local support for projects, and communities have seized opportunities for development,” said Jonathan Lash, president of the World Resources Institute (WRI). “But more work needs to be done. Too often, the rhetoric in support of community engagement does not match the practice.”

The report, Breaking Ground: Engaging Communities in Extractive and Infrastructure Projects, takes an in-depth look at international community engagement standards and how they often fall short of providing guidance to companies and communities. The work follows WRI’s 2007 report, Development Without Conflict, and is designed as a user’s guide to help companies and local community liaisons implement successful standards on-the-ground.

“Many national laws and financial institutions’ policies require companies to implement some type of community engagement in extractive and infrastructure projects, but do not necessarily provide guidance on how to do so,” said Kirk Herbertson of WRI, lead author of the report. “When local communities participate in the design and implementation of a project, they are more likely to understand and support the changes brought about by the project.”

In one of the examples from the report, community engagement during the construction of a natural gas project in the Philippines saved a U.S. company millions by allowing the company to complete construction ahead of schedule.

In another example, from Guatemala, a mining company helped rebuild its damaged reputation by inviting local communities to test and monitor water quality, as a way to provide credible assurances that a mine was not polluting their water source.

WRI’s accompanying video documentary on Thailand’s Mae Moh coal power project shows what happens when companies and governments refuse to engage the communities they develop. Hundreds of people filed a lawsuit against the government-controlled Electricity Generating Authority of Thailand (EGAT), alleging the coal mine and power plant poisoned them with toxic sulfur dioxide emissions and mine dust, and damaged their crops.

On Tuesday of this week, which is officially the World Bank’s Extractive Industries Week, a Thai court ruled that EGAT must compensate each of the victims and restore the environmental damage of the coal mine.

Extractive industry experts said at the World Bank conference that they continue to recognize the importance of engaging communities in mining projects, despite the ongoing economic crisis.