Bulletin

BRICS: A force for energy efficiency cooperation

26 Sep 2017

On 4-5 September 2017, China hosted the 9th BRICS Summit in the city of Xiamen. Addressing fellow leaders from Brazil, Russia, India and South Africa – which together with China make up the BRICS acronym-, Chinese President Xi Jinping announced a “golden decade” ahead for BRICS cooperation. “[We are] set to achieve greater development and play an even bigger role in international affairs,” he declared – and energy efficiency is no exception. Over the past five years, energy efficiency cooperation has taken on increasing importance in the group. This is no surprise: the BRICS countries collectively account for a third of global final energy consumption and 50 percent of total global cumulative energy savings between 1990 and 2010. What they do on energy efficiency can therefore matter a great deal. This article takes a closer look at BRICS energy efficiency collaboration.

To give a bit of background, energy efficiency first emerged as a priority area for the group in 2012, when BRICS leaders affirmed the growing need for energy-efficient and environmentally-friendly technologies in their declaration. It continued to gain recognition from then on and in 2013-14, senior BRICS officials began to explore ways to institutionalise their energy efficiency cooperation. This was realised on 20 November 2015, when BRICS Energy Ministers signed a ‘Memorandum of Mutual Understanding in Energy Saving and Energy Efficiency’, thereby establishing a BRICS Working Group on Energy Saving and Energy Efficiency.

In the MOU, countries recognised the necessity of enhancing energy efficiency cooperation, providing equal and open access to modern forms of energy, and promoting access to advanced and applicable energy-efficient technologies over the next ten years. They agreed to three pillars to guide their cooperation:

  1. Technology and policy sharing, including developing a data bank of energy-efficient technologies, sharing policies and best practices, and encouraging the deployment and up-take of these technologies and experiences.
  2. Mobilising investment into energy efficiency, including active cooperation between the public sector, private companies and international financial institutions.
  3. Promoting collaborative research and personnel exchange, including exploring the possibility of institutionalising energy efficiency cooperation in the area of R&D and capacity building.

A number of initiatives were set up to pursue these goals. In 2017, countries launched an Energy Research Cooperation Platform to support their work on energy efficiency and energy more widely. Its purpose is to conduct research and analysis, contribute to implementing BRICS investment projects in the energy sector, develop cooperation on energy technology, and improve training for personnel in BRICS countries. The platform is supported by two additional initiatives: the BRICS Network University and the BRICS Think Tank Council. The former is an association of universities offering online training in priority research areas identified by BRICS, including energy, and is overseen by the BRICS’ national ministries of education. The latter is a cooperative platform for think tanks from BRICS countries, aimed at facilitating joint research and intellectual debate. It is led by the foreign affairs ministries of member countries.

In addition, to mobilise investments the BRICS established the Energy and Green Economy Working Group to encourage public-private partnerships for energy efficient technologies. The Working Group is part of the BRICS Business Council, which was created in 2013 to promote and strengthen business, trade and investment ties amongst the business communities of the BRICS. It hosts an annual BRICS Trade Fair for companies to showcase their technologies and exchange ideas for how technology can deal with common development challenges. The Business Council and the BRICS’ New Development Bank (NDB) signed a memorandum in 2017 on strategic cooperation to guide and bring new impetus to the BRICS’ economic development through technology. In July 2017 the NDB issued its first five-year green bonds - valued at about USD 450 million – on the Chinese market with the aim of promoting energy efficiency and reducing air pollution. This marked the first time a non-Chinese financial entity released bonds on the Chinese market, paving the way for more such bonds in the future. The bank went on in September 2017 to approve its first loan for an energy efficiency project amounting to USD 200 million.

All these achievements show BRICS to be a force for energy efficiency cooperation. As the group welcomes its second decade of existence this year, its members look to strengthening their partnership and deepening their energy efficiency collaboration for the benefit of all. The next ten years seem set to be “golden” indeed for BRICS.