Authors: C.Polycarp, L.Brown, X.Fu-Bertaux.

Date: April 2013

(Full paper available here) 

What is it about? In an annex to the report Mobilizing Climate Investment: the role of international climate finance in creating readiness for scaled-up low-carbon energy, WRI presents two detailed case studies- one on the enabling environment for geothermal power installations in Indonesia and one on the enabling environment created in Thailand to maximise energy efficiency in the 1990s. This second case study looks at how Thailand, since 1992, has been creating the conditions to promote energy efficiency: a) the Energy Conservation Promotion Fund to raise funds to promote energy efficiency and reduce demand for fossil fuels; b) the Energy Conservation Promotion Fund (ECPF), funded through a tax on petroleum products; c) a national 5-year demand-side management plan to develop, manufacture and adopt energy efficiency equipment and processes. Through this programme, Thailand overachieved its energy saving targets. In the second phase, the programme was namely funded with domestic revenue and the government also created a revolving fund to provide credit lines to banks lending to energy efficiency projects. This helped leverage additional finance from the private sector.

Why we recommend reading this? The upcoming expert workshop for the Long-Term Finance Work Programme will be looking at how to create the enabling environments to maximise the effectiveness of climate finance within recipient countries. This case study gives an interesting overview of the different steps taken in Thailand to reach its energy saving objectives. This illustrates very concretely and positively the role of enabling environments in increasing the effectiveness of climate policy and investments – both internationally and domestically.