Advising governments in developing countries on public sector decarbonization
Public sector institutions and their extensions, such as public buildings, public utilities, and transportation facilities, typically consume up to 20 percent of a country’s energy resources. As a result, public facilities in urban areas can constitute a high share of electricity consumption, accounting for more than half of total greenhouse gas emissions.
While existing public buildings often have the potential to save 30 to 50 percent of their energy use, new public facilities can be constructed to meet even higher energy efficiency standards, which can also be replicated in the private sector. Establishing public energy efficiency measures and green procurement policies would help decarbonize the public sector. It could also create demand for low carbon energy and help increase market demand for sustainable products and services.
Through policy and regulation, governments can also significantly impact decarbonization in the industrial, commercial, and residential sectors,. Additionally, procurement practices and investments in public facilities, can provide scale to decarbonization technologies such as the utilization of energy-efficient equipment, distributed renewable energy, and energy-efficient and near zero carbon design of buildings, yielding immediate cost reductions, short payback times, and boosting local employment.
However, according to data from the Regulatory Indicators for Sustainable Energy (RISE), developing countries have adopted few regulations to support decarbonization. The public sector has the potential to showcase leadership toward a net zero carbon future by being an effective early adopter of innovative approaches. It can also contribute to innovation and market creation through planning, policy, and procurement.
ESMAP’s Zero Carbon Public Sector initiative aims to accelerate the uptake of energy-efficient and low carbon solutions for public institutions in developing countries. The initiative, aligned with the World Bank Group’s new Climate Change Action Plan, also recognizes the public sector’s potential to play a pivotal role in decarbonization, leading to a future with net zero emissions. It works by providing technical assistance to governments in developing countries to prioritize zero carbon pathways and low carbon activities for the public sector. It also helps them develop and implement activities to decarbonize the public sector within public buildings, public transport, street lighting, water, waste disposal, and district energy.
The Zero Carbon Public Sector initiative channels its support through three main activities:
- Knowledge generation and capacity building: The initiative supports decarbonization teams across the World Bank by crafting and disseminating global knowledge on decarbonization planning and technological options for the public sector. Under this activity, the initiative crafts reports and operational documents. Examples of topics covered are the specifications for low carbon goods and services, procurement guidelines, catalogs of options for low carbon technologies and projects for the public sector and the economics of low carbon projects and technologies. The knowledge products focus on the role of the public sector in facilitating the transition towards zero emissions.
- Regional and country-specific studies and technical assistance: The initiative allocates a substantial amount of grant funding, with a target of US$22 million, to World Bank regional operational teams to support governments in developing countries. Technical assistance covers advisory on creating enabling frameworks for the decarbonization of the public sector. It also focuses on facilitating investments to help build pipelines and provide evidence to guide market development. In addition, there are activities centered on capacity building to enable knowledge-sharing and develop a network of key stakeholders.
- Mobilization of financing: In addition to IBRD and IDA lending opportunities for scaling up finance through climate investment funds and facilities, the initiative also helps operational teams unlock new funding opportunities. Some examples include private sector finance through energy performance contracting, green bonds.
Between 2020 and 2021, ESMAP’s Zero Carbon Public Sector initiative supported 22 country and regional activities in all six regions where the World Bank works.
- Turkey: There are more than 175,000 public buildings across the country, so the energy efficiency potential in the public sector is vast. The Zero Carbon Public Sector initiative supported the design and implementation of a $200 million project in Turkey called the Energy Efficiency in Public Buildings Project, jointly supported by the World Bank and the Clean Technology Fund. The project invests in energy efficiency retrofits of public buildings and develops and implements performance-based contracts. The Energy Services Company (ESCO) contracts have outlined a specific minimum percentage of energy savings for a building in the tender documents. The bidders offer their most cost-effective approaches to meeting or exceeding the level of savings. In addition, the project pilots retrofitting buildings to Nearly Zero Carbon Buildings (NZEB) standards.
- Mexico: The Zero Carbon Public Sector initiative supported the development of manuals for designing energy-efficient options for various housing solutions. Examples include lighting, faucets and toilets, heating, roof insulation, and passive design. These were integrated into the government’s existing Sustainable Housing Subsidy program. The improved design measures can lead to annual household savings of $90–$323. Moreover, if applied to only 40 percent of households eligible for housing support, the design measures would contribute to the mitigation of up to 850,000 tons of CO2 emissions annually.