The path to sustainable growth

The World Bank’s Greening Firms in Georgia technical report highlights the urgent need to increase energy efficiency and reduce carbon dioxide emissions by the private sector in Georgia. The report emphasizes that despite Georgia’s small global carbon footprint, the country’s emissions have increased significantly due to private-sector energy consumption.

Comparative analysis of aggregate ecological performance

Georgia’s struggle to decouple GDP growth from carbon emissions is a central theme of the report. From 2000 to 2022, the country’s GDP grew by 184%, while CO2 emissions rose by 140%. Unlike many other countries, Georgia has failed to decouple economic growth from carbon emissions, raising concerns about its future environmental impact.

The private sector, including agriculture, industry, services, transportation and commercial buildings, is a major contributor to these emissions. Improving energy efficiency and adopting advanced technologies are identified as key steps to mitigate greenhouse gas (GHG) emissions. The report emphasizes that reducing energy consumption without affecting productivity is essential to improving overall efficiency and competitiveness.

Regulatory framework for energy efficiency

Georgia’s performance in energy efficiency (EE) and renewable energy regulatory frameworks is weaker compared to regional peers and EU aspirant countries. The Regulatory Indicators for Sustainable Energy (RISE) dataset highlights Georgia’s poor performance in several areas, including incentives and mandates, financing mechanisms, public utility programs, and carbon monitoring and pricing mechanisms.

The report indicates that Georgia’s regulatory environment requires significant improvements to support energy efficiency and renewable energy development. Addressing these gaps is key for the country to catch up with international standards and increase its energy efficiency.

Stakeholders, policies, strategies and legal frameworks

The report identifies a range of stakeholders involved in promoting energy efficiency, including government ministries, business associations, non-governmental organizations and international financial institutions. Effective coordination between these stakeholders is essential to achieving significant improvements in energy efficiency.

One of the key recommendations is to develop a comprehensive institutional and legal framework that supports energy efficiency initiatives. The report suggests that Georgia needs to improve its regulatory environment, establish appropriate incentives and encourage the adoption of energy-efficient technologies.

The Ministry of Economy and Sustainable Development (MoESD) plays a key role in developing national energy policies and strategies. The Ministry of Environmental Protection and Agriculture (MEPA) is also a major player in promoting the principles of sustainable development and integrating the green economy with traditional industries.

Energy Efficiency in Georgia: A Company-Level Analysis

The report delves into the heterogeneity of energy efficiency across companies and sectors, identifying areas with the greatest potential for improvement. It analyses differences in energy efficiency and the evolution of energy intensity over time, suggesting targeted policies to increase energy efficiency.

The analysis shows that improving energy efficiency is not only beneficial for reducing greenhouse gas emissions, but also for increasing the competitiveness and profitability of companies. By adopting state-of-the-art machinery and energy-saving management practices, companies can reduce their energy consumption and emissions, which is increasingly important in the context of rising global energy prices.

Technology implementation, innovation and energy efficiency

The relationship between technology adoption and energy efficiency is the central point of the report. It emphasizes the importance of investing in green technologies to improve the energy efficiency of companies and reduce greenhouse gas emissions. The report emphasizes that investments in green technologies are crucial for the private sector in Georgia to increase its energy efficiency and competitiveness.

Implementing both green and generic technologies is highlighted as a critical area of ​​opportunity. By investing in advanced technologies, companies can achieve significant energy savings and reduce their environmental impact.

Policy Recommendations

The report concludes with several policy recommendations to improve energy efficiency and reduce greenhouse gas emissions in Georgia. These include completing and implementing an enabling institutional and legal framework, supporting companies to invest in energy efficiency, and modernizing technologies and practices.

The recommendations underscore the need for a coordinated national strategy that aligns stakeholders’ efforts and resources. The report calls on the government to establish appropriate incentives, define programs and interventions, disseminate technology and knowledge, and encourage information sharing.

The Greening Firms in Georgia technical report highlights the key role of the private sector in Georgia in the country’s green transformation. By improving energy efficiency and adopting green technologies, Georgia can increase its economic competitiveness, access global markets and contribute to global efforts to combat climate change. The report’s recommendations provide a roadmap to achieving these goals, emphasizing the need for coordinated efforts, strong policies and targeted support.

FIRST PUBLICATION: Developing