Evaluating the Macroeconomic Impacts of Energy Efficiency Improvements in Uganda.

Großmann, A. & Hohmann, F. (2023): Evaluating the Macroeconomic Impacts of Energy Efficiency Improvements in Uganda. Policy Brief, Quarter 3, 2022/2023, Eschborn, Bonn.

Abstract

Uganda's energy demand is growing steadily, with consequences for the economy and the environment. Without energy efficiency measures, massive investments in new energy generation capacity are needed, and deforestation will continue unabated. Uganda commits itself to protect the climate by signing the Paris Agreement and submitting the Nationally Determined Contributions. Efficiency measures are an important pillar to reduce greenhouse gas (GHG) emissions and preserve carbon sinks. To explore possible benefits and challenges from energy efficiency measures, the e3.ug model was applied to evaluate their socio-economic and environmental impacts.
The results from the simulation of this policy scenario indicate that energy efficiency improvements are of advantage for Uganda. Economic, social, and environmental benefits are possible. Economic growth is accelerated, and additional jobs are created. Positive effects can be expected not only in sectors directly profiting from efficiency measures. Income-induced impacts can also be seen in agriculture, transport, and trade. However, policymakers should consider the financial barriers and information deficits that impede the diffusion of efficiency measures. Targeted support helps to achieve the expected benefits and limit implementation barriers.