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Thank you Junaid for the comment and questions. Yes, the Middle East and North Africa region stands out as energy intensity increased there by about 0.8% per year since 1990, according to data in the Sustainable Energy for All Global Tracking Framework report. This is cause for concern, as the rest of the world is moving in the opposite direction, reducing energy intensity by about 1.3% annually.

It is true that subsidized fossil-fuel-based energy prices discourage consumers from investing in energy efficiency. The good news is that governments can offer a blend of EE incentives, regulatory mechanisms and policy tools that can drive EE in the positive direction. Public funds currently used for energy subsidies that stymie EE investment and cause greater waste of energy could be used instead to provide smart EE incentives. Governments can set up robust implementation systems to implement energy efficiency regulations. They can adopt policies that focus on saving energy. Such approaches are examples of prudent fiscal management that also help consumers in a sustainable way.

Many countries have used such approaches to show that increased EE can be a precursor that smooths the transition to removal of energy price subsidies. If you look around the OECD countries, there are plenty of high-impact success stories in which EE regulations and policies (appliance standards, building EE codes, etc.) have been applied. These include Japan, Korea, the US, and Germany, to name a few. In the developing world, however, it has been more challenging to get effective implementation and compliance. In the short term, our experience suggests that the quickest returns can be had by concentrating on the "low hanging" opportunities through EE incentives.

The Bank Group's—including IFC's—investment programs in China and Eastern Europe have helped clients deliver results with this approach, and the same is true of similar work currently under way in Bahrain and Saudi Arabia. These EE incentives are thus a sound first step in getting some early progress on energy efficiency, while systems and infrastructure for EE policy implementation are strengthened and made more robust.