Market transformation for energy-efficient products: lessons from programs in developing countries

The Global Environment Facility (GEF) has allocated more than $90 million over the past 10 years to eight energy-efficient-product market transformation projects in developing and transition countries. We review the early experience and lessons from these projects and offer a framework for thinking about market transformation program design based on GEF project designs, cataloging both demand-side and supply-side strategies. GEF support has indeed managed to transform markets for energy-efficient products, with cost-effectiveness in the $1 to $10/ton carbon range. Sustained market, institutional, and policy changes have occurred, including price reductions, new standards, and higher market volume. Recommendations are given for future market transformation program designs.

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