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Email: kumar@ait.ac.th / visu@ait.ac.th
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The Asian Institute of Technology (AIT) is an autonomous international academic
institution in Bangkok, Thailand. Its main mission is the promotion of technological
changes and their management for sustainable development in the Asia Pacific region
through high-level education, research and outreach activities which integrate
technology, planning and management.
AIT carried out the Asian Regional Research Programme in Energy, Environment and
Climate (ARRPEEC) Phase-II, with the support of the Swedish International Development
Cooperation Agency (Sida). One of the projects under this programme is Small and
Medium scale Industries in Asia: Energy, Environment and Climate Interrelations.
The SMI project was aimed at promoting activities to mitigate greenhouse gas (GHG)
emissions and other pollutants in brick and ceramic, desiccated coconut, foundry, tea and
textile sectors in China, India, the Philippines, Sri Lanka and Viet Nam. The specific
project objectives were to:
i) Review the operational practices and technological status of the selected sector;
ii) Identify and study the factors for effective promotion of energy efficient and
environmentally sound technologies (E3ST);
iii) Enhance capacity mobilization to promote E3ST; and
iv) Review existing policies and develop a scenario for sustainable promotion of
E3ST.
2. Mr. R. Kannan
3. Mr. B. Basu
Research Fellows
i
Foreword
ii
Preface
This report is based on the research done in view of growing significance of SMI
in energy and environmental issues. Study was conducted to develop a framework of
policy instruments and strategies needed to promote energy efficient and
environmentally sound technologies (E3ST) in China, India, Philippines, Sri Lanka and
Vietnam for the desiccated coconut, foundry, tea, textile, and brick and ceramic sectors.
It is believed that this report will be useful to policy personnel and government
agencies involved in SMI, energy or environment, industrial organizations and
researchers. This report consists of chapters on overview of SMI sector in studied
countries, national policies on economy, energy and environment, trends in energy
consumption and its environmental impacts in study countries and policy instruments
to promote E3ST in the SMI sector.
We would like to thank the following experts for critically reviewing this
document and providing inputs:
? Ms. Lisa C. Antonio, Director, Philippine Business for Environment, Philippines;
? Ms. Jocelyn S. Esguerra, Project Manager, PRIME Project, Module 4 - Environmental
Entrepreneurship, Philippines;
? Mr. P.K. Kotta, Project Coordinator, SENRIC, South Asia Co-operative Environment
Programme, Sri Lanka;
? Mrs. Pham Thi Nga, Project Economist, Vietnam Energy Conservation Program Office,
Ministry of Science, Technology and Environment, Vietnam;
? Mr. Mark Radka, Energy Programme Coordinator, Energy and Ozone Action Unit, UNEP
Industry and Environment, France;
? Mr. T.L. Sankar, Former Principal, Administrative Staff College of India, Hyderabad, India;
? Dr. M.T. Thiagarajan, Founder Dean, School of Management, Pondicherry Central University,
Pondicherry, India;
? Mr. Le Nguyen Tuong, Chief of Planning and Finance Division, Institute of Meteorology
and Hydrology (IMH), Vietnam; and
? Prof. Meng Zhaoli, Tsinghua University, Beijing, China.
On behalf of the national research institutes (NRIs) and on our behalf, we take
this opportunity to thank Sida for sponsoring this timely and important study and to
AIT for providing an excellent atmosphere for carrying out this research.
S. Kumar
C. Visvanathan
iii
Executive Summary
In most developing countries in Asia, the Small and Medium scale Industries
(SMIs) play an important role in both income and employment generation. SMIs
constitute a major portion of the industrial sector and generally use excessive
energy and generate pollution, causing environmental degradation. In view of
the growing significance of SMI in energy and environmental issues, a study was
conducted to develop a framework of policy instruments and strategies needed to
promote energy efficient and environmentally sound technologies (E3ST) in China,
India, Philippines, Sri Lanka and Vietnam for the desiccated coconut, foundry,
tea, textile, and brick and ceramic sectors.
This report discusses the role of SMI in the economy, its employment
potential, and the support given to the SMI sector by governments through their
economic and industrial policies. A cross-country comparison of the existing
national policies on economy, energy and environment is highlighted. It was
revealed that as far as the industrial sector is concerned, the study countries
advocate foreign direct investment for industrial and infrastructure development,
and provide incentives for modernisation of technologies. The study countries
have also identified energy conservation and environment friendly technologies
as a means to reduce energy consumption and pollution of the industrial sector.
Energy conservation policies and environment protection laws are already in-place
in some countries and others are in the process of formulating one. However,
most policies are merely focused towards high energy consuming industries and
there is little or no consideration given in energy conservation, pollution control
policies and programs specifically for the SMI sector.
The major environmental problems related to fuel use by the industrial sector,
particularly the SMI in the study countries were analysed using published data
on energy and environment. Based on information on the types of fuel used, the
fuel mix adopted and the change in fuel mix ratio over a ten-year period, the
potential contribution to the global and local pollution was estimated. Although
SMIs are not the major polluters in most sub-sectors, they often pollute more per
unit compared to large-scale industries. Analysing the composition of criteria
pollutants and its change over time showed the impacts on the environment by
increased fuel consumption in the study countries. With the revealed evidence of
increasing energy consumption and consequent pollution, there is a need for
governments to address environment protection and energy conservation as two
important and integrated areas. Hence, E3ST is identified as one of the suitable
options, where both savings in energy input and reduction in emissions to the
atmosphere are simultaneously achieved.
iv
Though E3ST is considered as a means of future energy conservation and
industrial pollution management, SMIs in the developing countries have not
adopted E3ST readily due to some barriers. In fact, many E3ST methods can be
readily adopted by SMIs with little or no financial investments. However, lack of
awareness, education, and training on E3ST, lack of financing, lack of coordination
among various government departments, lack of enforcement of regulations, lack
of integration of energy and environment issues during policy formulation,
unfavorable energy pricing, lack of research and development, and lack of
infrastructures are the various factors that have slowed the implementation of
E3ST. Information and capacity building are likewise important issues that most
countries have to address at the beginning of these conservation programs.
v
There is a need to develop well-defined and time-bound action plans with
clear and simple structures for planning, coordination and implementation and
with adequate budget allocation for the promotion of E3ST targeting specific
industrial sub-sectors and locations while assigning specific responsibilities to
stakeholders. The action plans should allow updating based on the lessons learnt.
It should also be ensured that the private sector and end users be involved and
committed to the action plans and policies and support from key decision makers
are obtained. Plans and policies need to be communicated to the end users clearly.
In this way, the promotion of E3ST through policy interventions will successfully
result in energy conservation and environmental protection for the sustainable
development of the SMI sector.
vi
Table of Contents
Project Team i
Foreword ii
Preface iii
Executive Summary iv
Table of Contents vii
Units and Abbreviations ix
An Overview 15
Industrial Sector Energy Consumption and Energy Mix 15
Effects of Energy Consumption on Environment 17
A Cross-country Comparison 20
vii
BIBLIOGRAPHY 49
APPENDICES 53
viii
Units and Abbreviations
ix
PCAF Pollution Control and Abatement Fund
PCB Pollution Control Board
PM Particulate Matter
PPP Polluter Pays Principle
PRC People’s Republic of China
R&D Research and Development
SMI Small and Medium scale Industries
SO2 Sulfur Dioxide
SOE State-Owned Enterprises
TFS Technology Fact Sheets
TJ Terra Joules
UN United Nations
UNEP United Nations Environment Programme
WB World Bank
WTO World Trade Organization
x
OVERVIEW OF THE SMI SECTOR
1
E3ST
OVERVIEW OF THE SMI SECTOR
Source: (Hillary, 2000; UNESCAP, 1999; Williams, 1999;Priambdo, 1998); Note: For monetary conversions refer to Annex 1;
1 Vietnam: Ministry of Planning and Investment – Draft of Decree on Development of SMEs
2
E3ST
OVERVIEW OF THE SMI SECTOR
traditional, with very minimal Those SMI that are pragmatic would view
modernization over the years leading to this as an opportunity to upgrade their
wasted resources, high pollution levels, technology, innovate their products, and
and high occupational health and safety explore foreign markets. On the other
risks. They are individually owned or with hand, SMI that will continue to use
two to three partners. There have limited traditional technologies would face high
financial sources coming from competition to their great disadvantage.
development or commercial banks for
investments. Decision-making usually
relies on an individual, generally by the Sectoral Distribution of SMI
owner. Managerial and entrepreneurial
skills and employee skills are less with the Generally SMI are found in all major
limited access to information and manufacturing sub-sectors. However, for
financial resources. These limitations each country, there are characteristic sub-
make it difficult for SMI to upgrade their sectors that constitute the major part of the
technologies and allocate their resources SMI sector. For example, in the Philippines
efficiently. nearly 45% of the SMI sector is from the
food processing and desiccated coconut
The 90’s have brought globalization of sub-sectors and in China 95% of foundry
economies, and many countries have industries and 80% of textile industries
removed the protective tariff walls that belong to the SMI. In India, textiles and
usually prevent the international players foundry are some of the important SMI
from entering the domestic market.
Key: More than 80% More than 50% less than 80% Less than 50% Mostly Large Scale or not applicable
3
E3ST
OVERVIEW OF THE SMI SECTOR
sectors while in Sri Lanka textiles, brick Statistics show the importance of SMI in
and tea. Data show that textile and the industrial sector in Asia. They account
apparel, tea, desiccated coconut, brick, for more than 50% of the total industrial
wood and wood products constitute sector output in China and India, and for
more than 80% of SMI in each of the 10–25% in most other Asian countries.
study countries Unfortunately, sufficient data to analyse the
SMI contribution over the years do not
readily exist.
Importance of SMI Sector in
the Economy
SMI as an Employer
Irrespective of the definition, both
developing and developed counties In developing countries, the economic and
consider the SMI sector as an engine for social significance of small-scale enterprises
their economic growth and development. is well recognized. Enterprises of up to 50
They account for 60–70% of the workers are categorized in developing
domestic industrial production. Their countries as SMI. According to some
contribution to export earnings is about estimates, 17–27% of the labor force is
75–80%. Of this, about 30–40% is from employed by SMI. In Asia, the majority of
direct exports and the rest from population lives in rural areas where SMI
subcontracts and ancillary supplies. But provide 20–45% of full time employment
only 5–10% of SMI in all developing and 30–50% of household income. In
countries are engaged in export related developing countries, a larger proportion of
activities. SMI in developing countries SMI is employed in the manufacturing
cater the domestic markets but a vast sector. For example, in India 27% of the
export potential exists for those not yet 12.6 million micro and small-scale
engaged in it (Vepa, 1997). enterprises are in the manufacturing sector
(Hillary, 2000).
4
E3ST
OVERVIEW OF THE SMI SECTOR
5
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
Given the significant contribution of SMI 90 and at 6.1% during 1990–98. The
to the national economy, this chapter manufacturing sector contributes 16% of
presents the economic performance of the GDP and employs more than 24% of
the study countries and their respective the total industrial labor force (UN,
economic and industrial policies in order 1999). During the past decade, the
to examine the importance they give to manufacturing sector has shown a growth
the SMI. It also discusses the policies of of 8% compared to the 7.4% during
the study countries on energy and 1980–90.
environment. The salient features of the
policies (see Appendix C for the The Philippine economy has grown at the
outline of existing policies) are rate of 1% per annum over 1980–90 and
described and analyzed through cross- 3.3% over 1990–98. The manufacturing
country compa-risons. sector contributes 23% of GDP and
employs 10% of the total industrial
labour force (UN, 1999). During the past
Economic and decade, the manufacturing sector has
Industrialization Policies of shown an average growth of 3.1%
compared to 0.1% during 1980–90,
Study Countries indicating the increasing importance of
the sector within the economy. The
Economic Performance economy registered a GDP growth of
3.9% in 2000, continuing the recovery
The economy of the People’s Republic of stage in 1999. The agriculture sector grew
China (PRC) grew at the rate of 10.1% by 3.4%, the service sector by 4.4% and
during the period of 1980–90 and at the industry sector by 3.6% (ADB, 2000).
11.2% during 1990–98. The economy
rebounded in 1999 and 2000 after a deep An economic growth rate of 4% per
recession in 1998 in the wake of the annum over 1980–90 and 5.3% over
Asian financial crisis, with real GDP 1990–98 in Sri Lanka has been reported.
growth reaching 10.9% in 1999 and 8.8% The manufacturing sector contributes
in 2000 (ADB, 2000). The manufacturing 17% of the GDP and employs 15% of
sector contributes 40% of the GDP and the total industrial labour force (UN,
employs more than 15% of the total 1999). During the past decade the
industrial labor force (UN, 1999). manufacturing sector has shown a growth
rate of 8.5% compared to the 6.3%
The Indian economy has been growing at during 1980–90, indicating the increased
the rate of 5.8% per annum during 1980– importance of the sector within the
6
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
sector contributes 22% of the GDP and Philippines GDP 1980- GDP 1990- GDP 2000-
employs 10% of the total industrial labor
Indonesia
force (UN, 1999). During the past decade
the manufacturing sector has shown an India
increase from 4.8% in 1999. The main Source: UN, 1998; ADB, 2000
These data show that the Asian economy Domestic Economic Policy
has changed considerably during 1999 Initiatives
experiencing a recession. In early 1999,
an average annual growth of 4.4% was In China, building on a constitutional
expected for the region (ADB, 2000). amendment giving greater constitutional
However, the recovery has been uneven status to the private sector, several
across developing Asia. It was forecasted economic laws have been enacted to
that growth would be particularly strong develop a better legal and regulatory
both in PRC and India. The fast recovery framework for the market economy to
in the first half of 1999 in most of the function efficiently. The government also
economies affected by recession, viz. sought to improve private firms access to
Korea, Malaysia, Philippines, and credit by setting up credit guarantee
Thailand, is due to simulative monetary scheme for SMI in 70 cities. PRC’s
and fiscal policy. This turn-around was accession to WTO and the commitments
brought about by increased exports, to cut tariff, liberalized trade and
especially in the high-tech industries. The investment, and open up domestic
up-turn in the economy resulted in inflow sectors for foreign participation are
of foreign and private capital to Asia. The expected to bring sufficient efficiency
dip in economic growth stimulated some gains.
of the countries to rethink about changes
7
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
In recent years India has maintained low removal of tariff barriers and capital
interest rates to support industry sector inflows from foreign investments. All
recovery. In Sri Lanka, the policy these countries have gradually
dialogues focus on improving public deregulated most of their activities with
sector governance and efficiency, the commencement of the liberalization
promoting private sector growth and process. Competitiveness and efficient
reducing poverty. Industrial policy economic management have become
focuses on export oriented industry important considerations. In this
promotion with special consideration of economic environment, the private sector
SMI as an important segment in is regarded as the engine of growth.
providing employment and domestic
producer. As far as the industrial sector is
concerned, these countries advocate
The domestic policies of the Philippines foreign direct investment for industrial
focus mainly on improving macro and infrastructure development
economic stability, privatisation process, considering it a means for attracting
accelerating structural reforms and rural much needed capital. Privatisation of
development, enhancing competition and state run industries is one of the
private sector participation. The Vietnam industrial reforms except in India where
government continued with reforms in some sectors are listed only for the state.
2000 in private sector development, state Countries provide incentives for
owned enterprises (SOE) and banking. modernisation of technologies.
The government has formulated an SOE
reform plan (ADB, 2000). The economic indicators of these
countries during the past two decades
reveal that:
A Cross-Country Comparison The economic growth was highest in
China (11.2%) during 1990–1998
There are two distinct pathways for followed by India (6.1%) Vietnam
economic development observed around (8.4%), Sri Lanka (5.3%), and
the world, namely through open Philippines (3.3%).
economic policies or inward-looking, The manufacturing sector contri-
centrally- planned economic policies. In bution to GDP is highly significant
centrally-planned economies, a central in China (40%), followed by
body makes the decisions. In open Philippines (23%), Vietnam (22%),
economies, the individual decisions are Sri Lanka (17%), and India (16%).
considered in the economy-wide policy Manufacturing sector employment
decisions. In all the study countries, generation is significantly high in
governments have accepted in general an India (24% of total labor force).
open economic policy as a means of Manufacturing sector contribution to
achieving their economic growth. Under total labor employment is more than
this framework, the economies are 10% in all other countries.
opened for global markets through the
8
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
Vietnam
• Open Economic Policy with Government
control
• Industrial policy aims at FDI
• Focused towards modernisation in multi- Sri Lanka
sector industries and encourages • Open economic policy is accepted
improvement, modernisation and use of
• FDI is permitted
advanced technologies
China • Encouraging private sector participation with
• SMIs are important due to employment
• Open economic policy with government incentives for modernization and use of advanced
generation
control technologies, privatisation of state run institutions
• Equity in state-run institutions • Environmental Clearance for medium and large
• FDI is permitted
• Focused towards high tech and Source: Communiqué from the NRI scale industries is needed before start-up
agricultural based industries with • SMI sector is recognized by the policy and
incentives for modernization and employment generation is considered from SMI
privatization of state run industries.
THRUST AREAS Source: Central Bank of Sri Lanka, 1999
• Follows an industrial location policy
(western region) and closure of all old • Open economic policy
and polluting industries • Foreign Direct Investment (FDI)
• Employment generation is considered to • Industrial modernization & use
be from SMI sector of advanced technology India
• Industrial pollution • Open economic policy accepted
Source: CEST,1999
• Importance of SMI sector • FDI is permitted
• Privatisation of state run institutions with incentives for
modernization, focused towards all industries except
Philippines industries reserved for State
• Open economic policy is accepted • Environmental Clearance required for medium and large
• FDI is permitted scale industries before start-up and follows a locational
• Focused towards high tech and agricultural based policy for all medium and large scale industries (25kms
industries with incentives for modernization and away from the Standard Urban Area)
privatisation of state run industries • SMI sector is recognized by the policy (there is a
• Environmental Clearance required for industries reserved list for small industries) due to its employment
• SMI sector is recognized by the policy due to generation potential
potential for employment generation
Source: Secretariat for Industrial Assistance, 1999
Source: NEDA, 2000
E3S
Sri
Issue China India Indonesia Philippines Thailand Vietnam
Lanka
Open
1. Economic Open (with
(with Open Open Open Open Open
Policy control)
control)
2. Foreign Direct
Investment
4. Creation of
Employment (SMI) (SMI) (SMI) (SMI) (SMI) (SMI) (SMI)
5. Locational Not
(except
Policy mentioned
SMI)
6. Incentives for
modernization
Key: ( ) implies,
1 - Open economic policy is accepted; 2 - Foreign direct Investment accepted; 3 - High tech industries promoted
4 - SMI are important as source of employment; 5 - Advocate industry location policies;
6 - Incentives available for industry modernization; 7 - Private sector participation considered in economic development;
8 - Have started to privatise state run industries; 9 - Environmental clearance is required for new industries
10
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
11
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
China has notable progress in reducing unit energy consumption levels over the decade. Progress has
been made through widespread promotion of rudimentary energy management practices, energy
housekeeping measures, and a variety of retrofitting projects. Government units in all provinces have
been established to enforce energy consumption standards.
The institutional system which China has developed has succeeded in prodding a wide array of
enterprises to undertake technical and managerial measures to improve energy efficiency. Unlike the
U.S. approach, in which utility companies are instrumental, in China (as in Japan and Korea), the
government works directly with industrial enterprises. China’s program is now strong in its broad
coverage of enterprises, monitoring of consumption practices, promotion of energy efficiency goals,
and information dissemination. Efforts to improve energy efficiency have become a more integral
aspect of the energy planning process than in most developing countries. The system seems to work
well for disseminating information on consumption norms between provinces, and promoting generic
energy conservation investments.
On a technical level, China’s energy conservation strategies revolve around two basic themes: (a) linking
energy efficiency with the broader process of industrial growth, and (b) upgrading the efficiency of
existing equipment. The first theme was based on the opportunity presented by new investments taking
place in the industrial sector. Much industrial capacity installed in 1980 were below international
standards, but the focus then was long-term penalties in terms of high recurring costs and energy
consumption rates.
The second theme – upgrading the efficiency of existing equipment –had many components. This
includes promotion of industrial co-generation facilities, reduction of power transmission and
distribution losses, improvements in coal quality, and aggressive replacement of inefficient boilers and
motors.
(Source: World Bank Discussion Papers, 1994)
12
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
Policy Features China India Philippines Sri Lanka Vietnam
Energy Policy formulated by Yes (Energy Conservation Yes (Mega Power Policy); Energy Yes (Energy No No
the Government Law) Source-specific policies also Development Plan
declared. 2001-2004)
Implementation of Demand Only for high energy Not Mentioned Yes Carried out as an Yes (Master Plan
Side Management consuming industries. (Proposed under Energy independent for Energy
Conservation Bill 2000) Program Conservation and
Efficiency, 1998)
Conduction of Energy Yes, but compulsory only for Not Mentioned Yes Not mentioned Yes
Audit high energy consuming (Proposed under Energy
industries Conservation Bill 2000)
Promotion of Renewable Yes Yes Yes Not mentioned No
Energy Sources
Financial instruments for Yes, for conservation under Yes but only on power generation Yes but only on power Yes No
Energy Conservation Energy Conservation Fund side generation side
Financial incentives to Yes Yes (Provided by the Ministry of Not mentioned Not mentioned No
industries for Non-conventional Energy
use/generation of Sources and Indian Renewable
Renewable Energy Energy Development Agency)
Standards and Labels for Formulation of National Voluntary Labeling applicable Yes No No
Energy Conservation Standards and Introduction of only to a few consumer products
devices Certification and Labeling
Information dissemination Yes Yes Yes Yes Yes
on Energy Conservation &
efficiency
Promotion of R&D on Yes Not mentioned Yes Yes, under the No
development of indigenous Energy
technologies Conservation Act
Fund 1985
Target industry of the Policy Large Not mentioned Large Not mentioned Not mentioned
Private sector participation Not mentioned Yes Yes Yes No
in power generation
(including renewable power)
Provision of Yes Not Mentioned Yes but targeted to Not mentioned No
Penalties/prosecution for (Proposed under Energy Large Scale industries
non-compliance of rules Conservation Bill 2000)
Policy on Energy use and No. More focused on large No. More focused on large No. More focused on No. More focused No
E3S
Despite the absence of an energy policy in interest free loans for industries
Sri Lanka, energy issues are addressed in (National Industrial Pollution
departmental strategies and plans, but the Management Policy, 1996).
recognition of energy conservation and
environmental issues is inadequate.
However, the state owned authority for A Cross-country Comparison
electricity supply in Sri Lanka, Ceylon
Electricity Board (CEB) conducts demand Generally the existing energy
side management programs providing conservation and environmental laws,
energy audit services for industries, pre- plans and regulations aim at reducing
construction consultancy services for energy consumption and pollution
construction industries (technical drawings prevention in industries. Most of the
and recommendations based on energy existing energy policies focus on supply
efficiency), power quality analysis and side management. So far the laws and
lighting design for buildings for a fee. In plans do not especially target SMI but
addition, programs for energy efficient also cover them under the general
lighting and customer education are carried category of industries. The plans also
out for the domestic and small commercial include conservation of energy resources
sector. There are many other organizations and encourage the use of renewable
with diverse authorities and functions energy sources. However, provision is
involved in energy conservation programs made for continued renewal of the plans
however a cohesive attempt is non- in order for it to be more responsive to
prevalent in policy formulation. the changing needs of society. Research
and development to introduce devices
National standards for air emissions, noise for energy conservation and pollution
pollution and industrial effluents have been mitigation is included in most policies. In
set under the National Environmental Act most countries, different ministries or
of Sri Lanka (NEAP, 1998-2001). Under departments handle the energy and
this policy, Environmental Impact Assess- environment areas and also implement
ment (EIA) and Environmental Protection the laws independently. The only point
Licensing (EPL) are the administrative of integration of both issues is in the
procedures that industries should undergo development plans or project level.
for environmental clearance. EPL is mainly
applicable for new SMI. The SMI sector is There are three main approaches for
dealt with extensively in the industrial policy intervention namely, regulatory,
policies of Sri Lanka and is encouraged to market, and integrated approach where
participate in technology transfers with the both regulatory and market instruments
larger industries. Cleaner production is are used in a complementary manner. In
another initiative that incorporates the regulatory approach, monitoring and
programs to improve energy efficiency and enforcement cost is high and it needs
minimize environmental pollution for new higher administrative capacity and is a
industries. A Pollution Control and high cost to the country. But the market
Abatement Fund has been set up to provide approach brings about a voluntary
14
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
15
E3ST
NATIONAL POLICIES ON ECONOMY, ENERGY AND ENVIRONMENT
Policy Features China India Philippines Sri Lanka Vietnam
Formulation of No (Decision of the Yes, (Abatement of Pollution Yes, (PD 1151: Yes, (National Policy Yes (Environment
Environmental State Council on Policy, Philippine on Industrial Protection Law)
Policy Environmental National Conservation Environmental Policy) Pollution
Protection 1996/31) Strategy Management, 1996)
Statement of Conservation
and Development; Ecomark
Policy); National Environment
Policy under preparation
Adoption of PPP No Yes Yes Yes Yes
Encouragement of Yes Yes (CP Technology Policy) Yes Yes No
CP
Creation of Yes Yes Yes Yes Yes
Industrial Estates
Financial incentives Yes Yes Yes Yes No
for pollution
prevention
Formulation of Yes (Environment Yes (Environment Yes (Philippine Yes (National Yes (Vietnamese
Environ-mental Protection Law 1979, (Protection) Act, 1986) Environmental Code) Environmental Act Environmental Pollution
Protection Laws Revision 1989) No.47, 1980) Standards)
Declaration of Air Yes (Environment Yes (Environment Yes (Philippine Yes (National Yes (Vietnamese
Emission Standards Protection Law) (Protection) Act, 1986) Environmental Code) Environmental Act) Environmental Pollution
Standards)
Declaration of Yes (Environment Yes (Environment Yes (Philippine Yes (National Yes, under
Wastewater Protection Law) (Protection) Act, 1986) Environmental Code Environmental Act) Vietnamese Environmental
discharge Standards Pollution Standards
Requirement of Yes Yes Yes Yes Yes
EPL for Industries
Requirement of Yes Yes Yes Yes Yes
EIA for new
industries
Policy coverage for No No No No No
Pollution mitigation
in SMI
LEGEND: CP – Cleaner Production; EIA – Environmental Impact Assessment; EPL – Environmental Protection Licensing;
PPP – Polluter Pays Principle; SMI – Small and Medium scale Industries
E3S
This chapter describes the general trends particular is perceived as a serious threat
of energy consumption and consequent both in the developed and developing
environmental implications of the countries, where quality of life has
industrial sector (giving emphasis on hitherto been measured in terms of
SMI) in relation to the economic growth material output. Meanwhile, environ-
of each study country. The potential mental degradation has become a serious
factors that could enable SMI to adopt impediment to economic development
E3ST are identified. An analysis is further especially in developing countries today,
made on selected SMI sub-sectors to and environmental conservation is of a
determine its role within the whole considerable cost to them.
industrial sector.
The growing evidence of environmental
problems is due to a combination of
An Overview factors. Energy production, conversion,
transportation and utilization have been
The economic development of nations and continue to be a primary source of
results in increased demand for energy local, transnational, and global pollution.
resources. Shifts in the structure of Energy efficiency is one of the widely
consumption and production, however advocated methods of reducing pollution
alter the impact that changes in output in both developed and developing
have on changes in energy consumption. countries. During the past two centuries,
At present developing countries comprise the efficiency of energy use, as measured
more than 75% of the world population by the amount of energy needed to
but utilize only a quarter of the world’s provide a given output or service, has
energy. Their per capita energy improved by factors ranging between 50
consumption a mere one-tenth of what it and 100 times more (Anderson, 1993).
is in the rich countries. However it is Finding energy efficient and environ-
doubling every 15 years and is expected mentally sound technologies (E3ST) is
to increase fivefold over the next three one of the more important quests of
decades or so in the course of economic today because the adoption of such
growth (Anderson, 1996). provides many opportunities for
developing nations to achieve
The state of the environment is a major considerable economic and environment-
worldwide concern today. Pollution in al gains.
17
E3ST
TRENDS IN ENERGY CONSUMPTION AND ITS ENVIRONMENTAL IMPACTS
Sri Lanka
Trends in Total Industrial Energy
Consumption Philippines
India
The average annual increase in total
energy consumption by the manufac- China
Vietnam
Sri Lanka
Philippines
India
China
-10 -8 -6 -4 -2 0 2 4 6
Percentage
Annual Change in the manufacturing sector Energy Consumption based on GDP Contribution by
manufacturing Sector in Billion $ shows a downward trend for Vietnam, Sri Lanka and China.
18
E3ST
TRENDS IN ENERGY CONSUMPTION AND ITS ENVIRONMENTAL IMPACTS
19
E3ST
TRENDS IN ENRGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
India
100%
80%
China
Percentage
60%
100% 40%
80% 20%
Percentage
60% 0%
1987 1992 1997
40%
Year
20%
Data Source: (IEA, 1999)
0%
1987 1992 1997
Ye ar
80%
Philippines
Percentage
60%
80% 20%
Percentage
100%
60% 0%
1987 1992 1997
80%
40% Year
Percentage
60%
20%
Data Source: (IEA, 1999; Institute of Energy, 1995)
40%
0%
1987 1992 1997
20%
Year
0%
Legend:
Data Source: (IEA, 1999) 1987 1992 1997
Year
Biomass Natural gas
Coal Oil
Data Source: (IEA, 1999; ECF, 1999) Electricity
E3ST
Composition of Industrial Energy Consumption (TJ) in 1987, 1992 and 1997 varied in each Study Country.
20
TRENDS IN ENERGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
(1987-1997)
Pollutants
global climate change, which is of major
concern today. Isolated responses to one SO2
21
E3ST
TRENDS IN ENERGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
global and local environmental pressures. Renewable energy use is less in all
Prioritising the objectives and streamlining countries. Therefore, promotion of
the sectors, sub-sectors and grassroots level renewable energy should be a major
should be a major concern of policy focus in formulating national policies.
formulation in these individual countries.
Data shows that a larger portion of the Economic growth and energy
energy requirement of these countries still consumption have direct and indirect
comes from coal and that has a potential relationships but that cannot be deduced
for causing acid rains. Biomass also easily. However some empirical
accounts for a large portion of particulate estimates permit further analysis of the
matter and sulfur dioxide. Considering the issue relating economic development,
non-commercial use of biomass in other energy consumption and environment.
sectors, the effect could be much higher. Several studies have attempted to
High particulate matter and NOx can cause determine the changes in the structure of
detrimental health effects locally.
22
E3ST
TRENDS IN ENRGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
India
China
100%
80%
Percentage
100%
60%
80%
40%
Percentage
60%
20%
40%
0%
1987 1997 1987 1997 1987 1997 1987 1997
20%
CO2 CO2 SO2 SO2 NOx NOx PM PM
0%
1987 1997 1987 1997 1987 1997 1987 1997
Year-Pollutant
CO2 CO2 SO2 SO2 NOx NOx PM PM
Year - Pollutant
Vietnam
Philippines
100%
80%
Percentage
100%
60%
80%
40%
Percentage
Percentage
CO2 CO2 SO2 SO2 NOx NOx PM PM
60%
20%
0% Legend:
1987
CO2
1997
CO2
1987
SO2
1997
SO2
1987
NOx NOx
1997 1987
PM
1997
PM
Biomass Natural gas
Coal Oil
Year - Pollutant Electricity
Compositional Change for Criteria Pollutants from Industrial Energy Consumption by Source in Study Countries
E3ST
23
TRENDS IN ENERGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
24
E3ST
TRENDS IN ENERGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
25
E3ST
TRENDS IN ENERGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
sector GDP contribution during 1987– From the following tables, it can be
1997 shows that among the study concluded that the emission from the
countries, Vietnam, Sri Lanka and China SMI sector cannot be neglected at all.
had negative values, implying that Though emissions from individual SMI
emissions per GDP contribution by the are small, the fact that collective
industrial sector have decreased over this contribution is significant only means
decade. Such improvements could again that the SMI sector could have a
be indicative of the nature of the policies predominant effect in modifying the local
adopted by these countries. environment and its micro-climatic
condition. Hence any energy and
Energy use pattern and potential environment policy or plan should also
environmental impacts due to various address SMI specifically and SMI sub-
pollutants in selected SMI sub-sectors sectors should be addressed according to
have been studied and cross-country their importance in the economy, energy
comparisons were made on them. Sub- consumption, and contribution to local
sectors like textile, tea, foundry and brick pollution.
industries have been targeted here since
they generally dominate the whole SMI
sector.
Cross Country Comparison of Energy Consumption and Emissions in the Textile Industry
26
E3ST
TRENDS IN ENERGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
Specific
Total Energy Energy
Country Energy Source Emissions
Consumption Consumption
Coal 20%
Electrical:
5.6TWh Fuel Oil 19% 1.8 Mt of CO2
0.58 kWh/kg
(6% of agricultural Biomass 61% (0.75% of industrial emissions)
of tea made
India sector; <1% of
total industrial (Natural Gas is used 14.17 kt of SOX
Thermal:
consumption) only in the northeast (0.41% of industrial emissions)
4.38 kWh/kg
areas)
of tea made
Firewood 80%
2 TWh Electrical:
Fuel oil 12% 527 kt of CO2
(28% of 0.48 kWh/kg
Electricity 15-20% (22% of industrial emissions)
agricultural sector; of tea made
Sri Lanka
<10% of total
3.64 kt of SOX
industrial Thermal:
(<1% of industrial emissions)
consumption) 5.28 kWh/kg
of tea made
Electrical:
0.3 TWh Coal 80% 203 kt of CO2
0.50 kWh/kg
(6% of agricultural Electricity 20% (2% of industrial emissions)
of tea made
Vietnam sector; <1.5% of
total industrial 0.69 kt of SOX
Thermal:
consumption) (0.5% of industrial emissions)
12.2 kWh/kg
of tea made
Cross Country Comparison of Energy Consumption and Emissions in the Tea Industry
27
E3ST
TRENDS IN ENERGY CONSUMPTION AND ENVIRONMENTAL IMPACTS
Backward :
0.76 tce/t of casting
Dust: 0.55 Mt
20.5 106 TJ
General:
(44% of total
China NA Waste gases: 11 billion m3 0.56 tce/t of casting
industrial
consumption)
CO2 : 19.8 Mt Advanced:
(1% of total industrial emissions) 0.49 tce/t of casting
Cross Country Comparison of Energy Consumption and Emissions in the Foundry Industry
Cross Country Comparison of Energy Consumption and Emissions in the Brick Industry
28
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
This chapter identifies the barriers that development is through the adoption of
industries face in adopting E3ST, energy efficient and environmentally
suggests strategies and policy instruments sound technological options. Though
governments can implement to promote large industries have readily shifted to
such technologies especially in the SMI modern technologies for energy
sector, and describes some success stories efficiency and pollution prevention, and
of E3ST adoption in the study countries. have benefited financially from
conserving energy and minimizing waste,
the SMI for some reasons, is still
Rationale for Policy reluctant to follow suit. Therefore, there
Intervention is a need to address this gap at the policy
level by formulating strategies and
Management of energy and environment instruments to promote E3ST in the SMI
by the governments are carried out sector.
through policies or regulations. But in
most countries, the issues of energy and
environment are dealt with separately and Benefits of E3ST
by different departments of the
government. Some national energy There are many ways by which energy
policies predominantly deal with the can be conserved and adopting E3ST is
supply side management rather than one strategic way of achieving the dual
conservation at the end-user level. For goal of energy conservation and emission
each country, the ultimate objective of an prevention. While obtaining the desired
integrated energy and environmental output, the use of E3ST facilitates more
planning is to arrive at a set of agreed efficient use of energy resources,
feasible and consistent targets for policy improves eco-efficiency, and preserves
intervention. the environment as a whole. In other
words, by opting to implement E3ST
To support the growth of the SMI sector, over traditional technologies, industries
governments need to provide reliable and achieve a net saving in the energy input,
cost effective energy. Opportunities exist and also a reduction of greenhouse gas
for governments to link the economic emissions. It is not only beneficial to
policies with the energy and individual end users but the positive
environmental policies among industries impacts could be translated to a bigger
to reduce or minimize the burden of scale as savings in the production of
developing new infrastructure. One such energy and reduction in emissions on the
emerging area for sustainable national and even the global level.
29
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
Drying is the most energy intensive operation in black tea production. In many factories, three-stage
conventional dryers are used for drying. Fluidized bed driers are more energy efficient than conventional
dryers. This new dryer provides a lower drying temperature that ensures gradual removal of moisture and
uniform drying of tea – from the surface as well as from the core. Due to savings in fuel and waste reduction,
industries benefit economically. Due to higher efficiency than conventional driers, fuel is saved and hence
emissions are also reduced.
Background
Technical data
Category of E3ST
• Process Automation
• Process equipment improvement
• Improved energy efficiency
• Waste reduction and pollution control
30
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
31
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
32
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
were allowed to have branches in rural menting policies on E3ST. The lack of it
areas, while lending was also difficult due may lead to haphazard solutions. In the
to lack of suitable procedures and case of acid processing firms in Calcutta,
securities for loans (Worrell et al., 2001). India (Dasgupta, 1998), inefficient
Lack of finances also results in purchase operations resulted in indoor and
of inferior technology or second-hand, outdoor pollution. Due to lack of
low quality and inefficient devices or coordination between energy and
equipment. environment departments, the proposed
solution of constructing a central
Energy efficiency and environment effluent treatment plant may not be
protection have a low priority as beneficial since the solution did not
compared to expansion for SMI even address the main source of pollution
though the project viability may look which is inefficiency in process flow,
sound. Though interest free or low work practices and poor knowledge of
interest loans, subsidies, tax holidays and health and safety.
duty exemptions are available in many
cases, such financial incentives are
generally seen by SMI as not worth the Lack of Integration at Policy
risk. Formulation
Uncertainty of energy prices, especially in
the short term, often lead to higher Various authorities or departments deal
perceived risks, and therefore to more with management of energy and
stringent investment criteria and hence environmental issues separately, though
offer a higher hurdle rate in adopting the win-win possibilities of integrating
energy efficient technologies. Due to the them together are available, like in the
‘scale of economies’ advantage for the case of E3ST. By and large, E3ST has
large industry, SMI is forced to adopt not been recognized as an effective
inferior technology so that the end means of achieving energy and
product price can be competitive. These environment conservation goals at the
technologies are energy inefficient and policy level. Active collaboration
pollute more. Hence, fuel prices and between government and private
irrational market response due to industry is also important to find a
economic and socio-economic factors, collective solution. Consensus building
make the SMI not respond favorably to will foster an atmosphere where
E3ST use. technical and market information are
made easily available to industries while
encouraging them to adhere to
Lack of Coordination and government standards based on agreed
Slackness in Implementation timetables. This link is not found very
often in these countries.
Coordination among various agencies
and departments is important in imple-
33
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
34
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
35
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
36
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
37
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
38
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
39
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
Ambient Standards
Emissions TJ
Concentration Time
Pollutant A
Energy Consumption
Benchmark
Pollution Sources Specific
A ti
Industrial Residential. Transport Energy
Energy Source
Consumption
A
Sub-sector A B C
Energy Primary Renewable
Electricity
Sources
Activity Flow
Activity Flow Policy Flow
Policy Flow
Energy Input Target
Target Energy Import Local Energy
Coal Electricity Gas
Coal Oil Renewable Gas
Models for policy intervention by identifying the target, which could either be pollutant or fuel source-based
identified and the sectors and sub-sectors reduced total energy consumption for the
that emit them are also identified. They same industrial output.
are later associated with the specific fuel
used in the sub-sector. A policy to reduce
the specific pollutant is framed and Compulsion and Compliance
targeted to the specific sub-sector. In the
case of energy-based intervention, Sanctions based strategies (‘command
industrial activities whose specific energy and control’) aim to enforce regulations
consumption are higher than the by compulsion and coercion, with a penal
benchmarked values are identified and approach in dealing with deviant activity.
associated with specific sub-sector An extreme example is the judicial order
activities and fuel mix. The policy could to close down industries. Successful
is framed based on the specific energy implementation of this approach requires
consumption to force the sub-sectors to intensive monitoring to ensure that the
use efficient technologies which results in standards are being met. In the event of
40
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
41
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
Pollution Control and Abatement Fund (PCAF) is a 5 million US$ fund established in 1995 in Sri Lanka to
provide financial assistance to financially viable industrial enterprises towards waste minimisation, resource
recovery, pollution control and abatement. The scheme had two components (a) Technical Assistance and (b)
Credit Component. The loan could be obtained from any of the six participating credit institutions. Loan
disbursement is effected only after obtaining the Environmental Protection Licence.
Under the Technical Assistance component, reimbursement up to 75% of cost towards cost of consultancy
services for the investigation of waste minimization, preparation of designs, selection, supervision, installation
and operation of the equipment is effected. Under the Credit Component, finance up to a maximum amount of
US$ 128,000 per industry at zero real rate of interest is provided. Maximum repayment period will be 7 years
including a maximum of one year of grace period. Security needed for the loan is a mortgage over the project
assets. For projects that involve investment for modernization entailing a financial return in addition to the
desired environmental effects, a loan amount of 50% of such costs would be provided and for all other cases it
could be 100%. This loan could be used for purchase of equipment or phasing out of hazardous substances.
Over 75 industries have benefited from this scheme.
(Source: PCAF promotional brochure, National Development Bank, Sri Lanka)
42
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
to E3ST. Tariff revision to those SMI policy formulation stage itself, leading to
using E3ST by the utility/government benefits.
may also be considered for a specific
period. An Energy Conservation
Revolving Fund may help to meet the Capacity Building and
financial requirements of SMI wanting to Information Exchange
adapt E3ST.
Planning and implementation of energy
conservation programs in an integrated
Integrate Issues on Energy and manner needs a concerted build up of
Environment in Planning Stage human resources and other capabilities.
Most often lack of knowledge and
The traditional energy planning carried “correct” information by SMI deters the
out by considering the projected energy effectiveness of the conservation
consumption and growth patterns of programs. Demonstration projects,
different sectors of the economy does training, information education
not consider the end user energy saving campaign, information clearing house for
potential or consequent environmental technology transfers, public awareness
and social costs. This resulted in most campaign, reporting of success stories,
countries investing a large sum of money publication in media, awards, workshops
in supply side extension. In the integrated and seminars are some of the methods
model, consideration is given for the adapted by many countries and
potential energy savings by different end institutions to disseminate the knowledge.
users thereby reducing the investment UNEP has conducted many training
costs in supply side expansion and brings
in social and environmental costs into the CLEANER PRODUCTION (CP) AUDITS AS AN
planning process (Swisher, et al., 1997). ECONOMIC STIMULUS
43
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
44
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
Such efforts are yet to be initiated in Sri • reduction in operating costs especially
Lanka and Vietnam. in materials, water and energy
• reduction in pre-treatment and off-
Benchmarking is another method that is site disposal costs
increasingly adopted both by industries • reduction in environmental liability
and policy makers. This compares
• improvement in public image.
indicators with determined reference or
target values (usually within a sector),
To the environmental and energy
obtained within or across companies, as a
administrators, concentrating industries
tool for deriving improvement measures
in one location would improve
and goals over present position (FEM,
effectiveness of enforcement by cutting
1997). Indicators could be specific fuel
administration costs, and also help in
consumption, specific emission or waste
implementing cleaner production and
generation, specific material input, etc.
energy conservation programs. Industries
can exchange by-products such as surplus
energy, waste heat and other materials.
Creation of Industrial Estates This pattern of inter-company reuse and
recycling reduces resource (raw material
Siting industries within industrial estates and energy) consumption. The wastes of
or zones could also promote energy individual SMI can be sent to a central
conservation and better environmental processingplant where common treat-
management. SMI in close proximities to ment facilities are operated. This reduces
the large industries would create a overhead costs of SMI and helps them
symbiosis whereby both industries could operate their facilities without needing
benefit. Some of the benefits are (UNEP, any modification. All countries
1997): considered in the study encourage the
creation of such industrial estates.
WASTE EXCHANGE
45
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
46
E3ST
POLICY INSTRUMENTS TO PROMOTE E3ST
Coordination
Planning Planning & Implementation Ministry of:
Energy
Coordination Committee Environment
Policies
Standard Setting Industries
Science and Technology
Finance
Finance
Donor Coordination Trade Chambers
Regional Industry Associations
Enforcement Agencies
Monitoring
Sub-committee on Utility Companies
Data Gathering Monitoring Industry Associations
Source Monitoring Chambers
Data Dissemination
Action
Enforcement Line Agencies – Utility Companies
Environmental Authority
Beneficiaries
Industries
Implementation
Chambers and Associations
47
E3ST
BIBLIOGRAPHY
BIBLIOGRAPHY
Asian Development Bank (ADB), ADB Annual Report 2000, Manila, Philippines.
http://www.adb.org/Documents/Reports/Annual_Report/2000/default.asp,
(2000).
Asian Development Bank (ADB), Key Indicators 2001: Growth and Change in Asia
and the Pacific, Manila, Philippines, http://www.adb.org/Documents/Books/
Key_Indicators/2001/default.asp (2001).
Anderson, D., Energy and Environment Technical and Economic Possibilities, Finance
and Development, USA, (1996).
Asia Pacific Energy Research Centre (APERC), Energy Efficiency Indicators, A Study
of Energy Efficiency Indicators for Industry in APEC Economies, Tokyo: Asia Pacific
Energy Research Centre, Institute of Energy Economics, (2000).
Central Bank of Sri Lanka, Annual Report 1998, Colombo: Central Bank of Sri
Lanka, (1999).
Dasgupta, N., Tall blunders: present strategies do more harm than good, Down to
Earth, 30 September: 22-25, (1998).
De Bruijn, Theo J.N.M. and Hofman, Peter S., Pollution Prevention in Small and
Medium sized Enterprises, GMI 30 Summer 2000. 2001 Greenleaf Publishing Ltd.,
(2000).
Energy Conservation Fund (ECF), Sri Lanka Energy Balance 1997, Colombo: Energy
Conservation Fund, Sri Lanka, (1999).
Hillary, R., Small and Medium-Sized Enterprises and the Environment, U.K.: Green Leaf
Publishing, (2000).
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BIBLIOGRAPHY
Institute of Energy, Vietnam Energy Review, Hanoi: Institute of Energy, Vietnam (1995).
Kritiporn, P., Pnanyotou, T. and Charnprateep, K., The Greening of Thai industry:
Producing More and Polluting Less, Bangkok: Thailand Development Research Institute
Foundation, (1990).
Kumar, S., Visvanathan, C., Kannan, R., and Herrera, A.B., Networking to promote
energy efficient and environmentally sound technologies in small and medium scale
industries, International Journal of Global Energy Issues, Vol. 17, No. 4, (2002).
Lei, P.C.K. and Yang, D.S.C., The implementation of controls over the management
of chemical waste in Hong Kong, Proceedings of the Pacific Basin Conference on
Hazardous Waste, Honolulu, Hawaii, November, (1993).
Palaniappan, C., Subramaniam, K., Economics of solar air preheating in south Indian
tea factories: a case study, Solar Energy, Vol. 63, No. 1: 31- 37, (1998).
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BIBLIOGRAPHY
Parikh, J.E., Painuly, J.P. and Bhattacharya, K., Environmentally Sound Energy Case
Study of the Power Sector in India , Working Paper No 6, UNEP, Denmark:
Collaborating Centre on Energy and Environment, (1997).
Priambodo, A., GHG Mitigation Potential in Small and Medium Scale Industries in
Indonesia and Thailand, Masters Thesis, Asian Institute of Technology, Thailand,
(1998).
Swisher, J.N., Jannuzzi, G.dM. and Redlinger, R.Y., Integrated Resource Planning –
Improving Energy Efficiency and Protecting the Environment, UNEP Collaborating
Centre on Energy and Management, (1997).
Tikkoo, V., Case study on hazardous waste from small-scale industries in Bombay,
India, Paper for UMP/UNCHS, Nairobi, (1992).
United Nations (UN), Statistical Yearbook for Asia and the Pacific -1998, New York:
United Nations, (1999).
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BIBLIOGRAPHY
United Nations Economic and Social Commission for Asia and the Pacific
UNESCAP), Compendium on Energy Conservation Legislation in Countries of the Asia
and Pacific Region, New York: United Nations (UN), (1999).
Vepa, R.K., Regional Cooperation for Development of Export-Oriented Small and Medium
Enterprises in the ESCAP Region, Consultative Meeting on the Regional Experience
of Export-Oriented Small and Medium Enterprises, Bangkok: United Nations
Economic and Social Commission for the Asia and the Pacific, Thailand, (1997).
Williams, T., The Impact of Credit on Small & Medium-Scale Industries (SMI) in Sri Lanka,
Colombo: Institute of Policy Studies, Sri Lanka, (1999).
World Bank, World Bank Discussion Paper No. 224, Towards an Environmental Strategy
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Worrell, E., Rene van, B., Zhou, F., Christoph, M., Roberto, S., Robert, O.W.,
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52
APPENDIX A: CONVERSION FACTORS AND EXCHANGE RATES USED IN THE STUDY
Conversion Factors
1 Unit MWh 0.086 toe
1 Unit MWh 3.6 GJ
1 Unit k toe 42 TJ
1 Unit k Cal 4.2 kJ
1 Unit kJ 0.2778/1000 kWh
MWh of Hydro
1 Unit 0.24 toe
Electricity
Calorific Value
Diesel 43,744 k J/kg
Fuel wood 12,000 kJ/kg
Exchange Rates
Exchange Rate - US$
Currency
1987 1992 1997
53
APPENDIX B: SALIENT FEATURES OF ENERGY AND ENVIRONMENTAL POLICIES IN THE STUDY COUNTRIES
CHINA
The Energy Conservation Law of the People’s Republic of China was adopted by the
Standing Committee of the National People’s Congress at its 28th meeting on
1 November, 1997 and was implemented on 1 January, 1998. The features include the
following:
? Efficient and rational use of energy;
? Reduce energy consumption per unit of economic output;
? Reduce energy consumption per physical unit of production;
? Encourage new and renewable sources of energy;
? Energy saving certification and labelling system;
? Formulation of national standards of energy conservation subject to continuous
improvement and perfection;
? Formulation of a system for discontinuing backward, over energy-intensive
energy-consuming products and equipment;
? Energy conservation management in key target energy consuming industries
(>10,000 tce);
? Target industries should conduct energy audits;
? Develop energy conservation responsibility system and reporting mechanism
? Awards for groups and individuals;
? Stop using energy consuming products within a stipulated time period;
? Establish energy management positions;
? Undertake energy conservation research and establish demonstration projects
? Establish Energy Conservation Fund;
? Development of Energy Efficient Building codes;
? Usage of energy for free or charged at a fixed fee is prohibited; and
? Legal powers to stop production and use of energy inefficient systems and
devices.
54
APPENDIX B: SALIENT FEATURES OF ENERGY AND ENVIRONMENTAL POLICIES IN THE STUDY COUNTRIES
The 1979 Environmental Protection Law of China, and its revision during 1989, deals
with:
? Air pollution control,
? Discharge standards, and
? Industrial Discharge control.
INDIA
55
APPENDIX B: SALIENT FEATURES OF ENERGY AND ENVIRONMENTAL POLICIES IN THE STUDY COUNTRIES
56
APPENDIX B: SALIENT FEATURES OF ENERGY AND ENVIRONMENTAL POLICIES IN THE STUDY COUNTRIES
PHILIPPINES
57
APPENDIX B: SALIENT FEATURES OF ENERGY AND ENVIRONMENTAL POLICIES IN THE STUDY COUNTRIES
SRI LANKA
Energy Conservation Fund Act 1985 (Statutory body in the Ministry of Power and
Energy):
? Facilitates and promotes energy efficiency; capacity building; creation of
network linkages; and promotion of R&D.
58
APPENDIX B: SALIENT FEATURES OF ENERGY AND ENVIRONMENTAL POLICIES IN THE STUDY COUNTRIES
VIETNAM
There is no energy law (Decree on Energy Conservation and Degree on SMEs are under
preparation).
Master Plan for Energy Conservation and Efficiency – Ministry of Science, Technology
and Environment (MoSTE), 1998:
? Overall reduction of 8-10% total energy consumption and 3.5–5% peak load
consumption;
? Reduction in consumption of coal, fuel oil, and electricity;
? Interventions planned are:
o Short-term: non or low investment cost measures including
improvement of energy management system and maintenance of
equipment;
o Medium-term: requiring investments with a payback period of less
than 3 years;
o Long-term: requiring investments with a pay back period of more
than 3 years including replacements with newer and more efficient
equipment.
? Plan also includes measures for institutional development.
59