Energy Efficiency improvements to generate more economic output with less energy input is essential for the Arab countries to enhance economic competitiveness, improve trade balance, Improve environmental quality, cut carbon emissions, create new Jobs and enhance energy security for oil importing countries such as Jordan, Lebanon, and Morocco. In addition, energy efficiency can play a key role in alleviating burdens on states’ budgets due to saving in energy subsidies, a policy widely adopted in the Arab region. Furthermore, energy efficiency must help reduce the energy and carbon intensities of the heavily intensive Arab economies. At a basic level, reduction in energy use per unit of economic output can be achieved in two ways—through energy savings stemming from technical efficiency gains throughout the energy value chain, and through changes in economic structure to avoid energy intensive economic activities.
Yet, a set of market and non-market barriers need to be addressed in order to improve energy efficiency in the Arab region. In addition to lack of economic incentives, codes, and energy performance standards, heavy energy subsidies stand on top of the hurdles to achieve that goal. Another essential issue blocking the realization of the potential energy savings is the lack of or the underdeveloped energy efficiency investment delivery mechanisms. Renewed and strong efforts are required to develop innovative financing schemes to level the playground for energy efficiency investments.
Recently, there have been few market drivers for energy efficiency in the region, which have called for more rational energy use and demand side management; notably restructuring the energy sector to attract private investment, corporatization of some state-owned utilities, environmental concerns and the need for de-carbonization of economic development.
Luckily, technology exists to help tackle energy efficiency on many levels from reducing electrical consumption to controlling other energy sources more efficiently. However, strong regulatory measures are required to ensure these technologies are adopted.
The long history of supply oriented energy planning should be replaced by balanced energy supply-demand strategies unlocking the hidden resource of energy efficiency. A portfolio of strong, carefully targeted policies is needed to promote energy efficiency while mitigating climate change at zero or negative costs.
Dr. Ibrahim Abdelgelil is professor of Sheikh Zayed Bin Sultan Al Nahayan Academic Chair for Energy and Environment at Arabian Gulf University in Bahrain.