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INSIDE STORY: Creating market support for energy efficiency: India’s Perform, Achieve and Trade scheme

This CDKN Inside Story, Creating market support for energy efficiency: India’s Perform, Achieve and Trade scheme, explains how India has become the first developing country to adopt an energy efficiency trading scheme that uses market-based mechanisms.

There is significant potential to improve efficiency in energy-intensive industries and the electric sector, which together were responsible for about 60% of India’s greenhouse gas emissions in 2007. By targeting large energy consumers the Perform, Achieve and Trade (PAT) scheme aims to reduce energy consumption by 6.6 million tons of oil equivalent across 478 facilities, with each plant averaging a reduction in energy use of 4.8%.

The energy efficiency measures introduced under PAT will help to reduce emissions by 26 million tonnes of CO2 equivalent by 2015, thus contributing to the national target of reducing carbon intensity by 20 – 25% from 2005 levels by 2020. This brief provides an overview of the scheme, examines key issues related to its design and implementation, and concludes with some early lessons for countries considering similar initiatives.