Assessment of AID environmental programs : energy conservation in Pakistan

The program has had an impact on energy savings and reduced pollutant emissions by participants, which though small in the national context, demonstrates the potential for energy efficiency in many sectors. ENERCON estimates that the program has led to $3.6 million in annual savings and 50% reduction in carbon monoxide and sulphur dioxide emissions in participating firms, an 11% reduction in gasoline consumption and a 50% drop in carbon monoxide and sulfur dioxide emissions in tuned-up cars, and substantial reductions in energy consumption and/or noxious emissions in agriculture and public buildings. After recovery of the private investment costs of participating firms, the rate of return on USAID"s $15.5 million is, in the industrial sector alone, about 19%. Additionally, energy audit and training costs have dropped to sustainable levels. Overall, ENERCON"s sustainability is uncertain, although it has strengthened both public and private sector technical capacities and has created a modest demand for energy conservation consulting services. It has proved most effective when it has sponsored focused energy audits (e.g., improved boiler efficiency, electric power use adjustments) and less effective when it has attempted total energy management surveys. Lessons learned are as follows. (1) A successful energy conservation program requires a favorable economic and political climate. (2) Energy conservation sells best when participants are given access to low-cost technologies with prompt pay-backs. (3) Local private engineering expertise is critical for spreading and sustaining energy conservation services. (4) Flexible project designs permit managers to respond effectively to new conditions. In conclusion, the evaluation discusses three outstanding issues -- the roles of subsidies, of nonproject assistance, and of NGOs -- recommending that they be reassessed after 5 years.