Energy efficiency to reduce poverty and emissions: a silver bullet or wishful thinking? Analysis of efficient lighting CDM projects in India

Energy efficiency is a major strategy to reduce greenhouse gas emissions. Thus, it is being implemented as part of the Kyoto Protocol's Clean Development Mechanism (CDM). Efficient lighting CDM projects claim to alleviate poverty and reduce emissions, while also aiding buyers of Certified Emission Reductions credits (CERs) to meet their abatement targets. Yet, as energy savings calculations do not account for behavioural responses, which cause "rebound effects", a limited analysis may lead us to be overoptimistic about these projects' environmental accomplishments. This study estimates the impact of, the expenditure of monetary savings (understood as "poverty alleviation") on the reduction targets tof two CDM projects. Results suggest that the projects may, in fact, reduce electricity consumption further than expected; however, in terms of CO2 emissions, results vary. Whereas in one case the effect may not significantly affect the CO2 target, in the other it may compromise around 8% or 19% of it, consequently leading to an overestimation of CERs. A wider perspective of analysis is needed if energy efficient projects are to be held as a "silver bullet". (C) 2013 The Authors. Published by Elsevier B.V.