Barriers to energy efficiency in developing countries' industry sectors: Empirical evidence from clean development mechanism (CDM) projects

This paper conceptually and empirically analyzes barriers to adoption and implementation of industrial energy efficiency technology in developing countries. We distinguish between micro and macro-level barriers and highlight differences between more and less industrialized developing countries. Based on 197 Clean Development Mechanism project design documents barriers to energy efficiency are identified for projects related to industrial energy efficiency. Results from econometric analyses suggest that projects in lower-income countries experience a wider set of barriers, most of which act at the micro level. The most relevant barriers at the micro level are technical and financial risks. At the macro level, the most relevant barriers are lack of human capital, lack of technical infrastructure and lack of access to external capital.