Deploying Energy-Efficiency and Renewable-Energy Technologies in Residential and Commercial Buildings

What are the Trading Opportunities for Developing Countries?

by Rene Vossenaar and Veena Jha

Environmental Goods and Services Series • Issue Paper 11

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In order to enable a better understanding of the patterns of trade flows and market drivers for climate-friendly technologies and associated goods, it is important as a first step to map the key ones in a number of sectors. This paper by Mr. Rene Vossenaar and Dr. Veena Jha builds on a mapping exercise of climate-friendly technologies and associated goods in the residential and commercial buildings sector carried out by experts from the Energy and Resources Institute(TERI), India and their subsequent classification under the Harmonised System (HS) customs codes at the 6-digit level undertaken by Mr Izaak Wind, an expert and former Deputy-Director at the World Customs Organisation (WCO). Similar mapping studies and customs classification exercises have already been carried out for climate-friendly technologies and associated goods in the renewable energy supply and transport sectors in order to feed into subsequent trade analyses for these sectors.

This paper highlights the challenges involved in accurately identifying and classifying for tradestatistics purposes many of the energy-efficient goods used in the buildings sector. It also underscores the importance of policy interventions, regulations and incentives as a major driver of technology deployment, and in some cases, as a major determinant of international trade flows in these goods. Consequently, enhanced trade and market creation for these goods require, in addition to low tariffs at the border, the existence of these regulations and incentives. Incentives are particularly important as the high cost for a number of renewable energy and energy-efficiency technologies associated with the buildings sector constrain market diffusion. The paper shows the main exporting and importing countries for equipment associated with key categories of building technologies as well as the prevailing tariff-levels for these. The paper concludes that in order to promote a significant uptake of renewable energy and energy-efficiency technologies in residential and commercial buildings, trade-liberalisation will need to be complemented by an integrated national policy for energy-efficiency and renewable energy generation in the buildings sector supported by international cooperation in technological knowledge-sharing, financing and capacity-building. Policy coordination and collaboration, for instance in the case of standards, can also enable international trade to contribute meaningfully to global market transformation.

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