overall home energy efficiencies; reduced mould and dampness; and less indoor air pollution from inefficient heating systems, etc. Available financial tools for financing low-carbon and climate-friendly housing are well summarized in a recent analysis of Green Economy development opportunities by the United Nations Environment Programme (UNEP) ii. The analysis, Towards a green economy: pathways to sustainable development and poverty eradication, discusses tools in the following categories, to which only a very brief mention is made here: 44
• • • •
tradeable quotas (e.g., cap-and-trade) energy performance contracting cooperative procurement Clean Development Mechanism (CDM) and other flexible mechanisms supporting implementation of the United Nations Framework Convention on Climate Change (UNFCCC) Kyoto Protocol • regional, national and local tax instruments/incentives for energy efficiency certification schemes. The Clean Development Mechanism (CDM) is regarded as one of the most important international mechanisms for financing emissions reductions and supporting sustainable development in developing countries. It awards certified “emissions reductions credits” to developed countries investing in projects that reduce emissions in developing countries beyond what would have been otherwise attainable. However, among the more than 4,500 CDM projects that had been submitted for CDM review (as of April 2009), only 14 addressed energy efficiencies in buildings.44 This is largely because the current array of CDM requirements make it difficult or unprofitable for housing projects to demonstrate energy efficiencies that qualify for support. Key barriers, as described by UNEP and other analyses, include: 1) absence of realistic and well-defined building/energy performance baselines against which proposed CDM projects can demonstrate improvements 2) requirements for detailed “technology-focused” demonstration of energy savings, rather than a “whole building” approach that might include a number of integrated measures (e.g. passive design, heating, and lighting). This adds greatly to the administrative cost of a CDM application. At national and regional level, tradable carbon and energy “certificates” are among the most common market-based policy instruments. Sometimes called rainbow certificates, these include “white” certificates for energy savings, “green” for renewable energy, and “black” for greenhouse gas reductions, and are being implemented through national and regional legislative mechanisms of different countries and regions: 45
• “Black certificates” are emissions allowances for defined quantities (in tons) of CO2 over a given period, as managed under the European Union Emission Trading Scheme (EUETS). • “White certificates” are based on mandatory energy saving targets that certain actors (e.g. power companies and gas suppliers) have to meet by promoting energy efficiency programmes to their customers (including households). They are currently
ii The UNEP-led Green Economy Initiative, launched in late 2008, consists of several components whose
collective overall objective is to provide analysis and policy support for investing in green sectors and in more sustainable development in major economic sectors, such as building and transport. Tools to assess, plan and finance healthy and climate-friendly housing
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