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© 2024 The World Bank Group 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank Groupwith external contributions. “The World Bank Group” refers tothe legally separate organizations of the International Bank forReconstruction and Development (IBRD), the International Devel-opment Association (IDA), the International Finance Corporation(IFC), and the Multilateral Investment Guarantee Agency (MIGA). The World Bank Group does not guarantee the accuracy,reliability or completeness of the content included in this work, orthe conclusions or judgments described herein, and accepts noresponsibility or liability for any omissions or errors (including,without limitation, typographical errors and technical errors) inthe content whatsoever or for reliance thereon. The boundaries,colors, denominations, and other information shown on any mapin this work do not imply any judgment on the part of the WorldBank Group concerning the legal status of any territory or theendorsement or acceptance of such boundaries. The findings,interpretations, and conclusions expressed in this volume do notnecessarily reflect the views of the organizations of the WorldBank Group, their respective Boards of Executive Directors, andthe governments they represent. The contents of this work are intended for general informationalpurposes only and are not intended to constitute legal, securities,or investment advice, an opinion regarding the appropriatenessof any investment, or a solicitation of any type. Some of the orga-nizations of the World Bank Group or their affiliates may have aninvestment in, provide other advice or services to, or otherwisehave a financial interest in, certain of the companies and partiesnamed herein. Nothing herein shall constitute or be construed or considered tobe a limitation upon or waiver of the privileges and immunities ofany of the organizations of The World Bank Group, all of whichare specifically reserved. Rights and Permissions The material in this work is subject to copyright. Because TheWorld Bank Group encourages dissemination of its knowledge,this work may be reproduced, in whole or in part, for noncom-mercial purposes as long as full attribution to this work is givenand all further permissions that may be required for such use(as noted herein) are acquired. The World Bank Group does notwarrant that the content contained in this work will not infringeon the rights of third parties, and accepts no responsibility orliability in this regard. All queries on rights and licenses shouldbe addressed to World Bank Publications, The World BankGroup, 1818 H Street NW, Washington, DC 20433, USA; e-mail:pubrights@worldbank.org. TECHNICALREPORT Acknowledgments Leonardo Iacovone, Matias Belacin, Xavier Cirera, and SantiagoReyes Ortega authored this report. Chapter 1 is based on an earlynote by Giorgi Mukhilishvili. The report was prepared under thesupervision of Ilias Skamnelos (Practice Manager) and the overallguidance of Lalita Moorty (Regional Director) and Sebastian Mo-lineus (Country Director). The authors are thankful for commentsreceived during the review meeting from Kevin Carey, PenelopeAnn Mealy, Marcio Cruz, Mona Prasad, Florian Kitt, Miguel Eduar-do Sanchez Martin, and Teona Elizarashvili. The authors are grate-ful to the companies that agreed to participate in the case studies,our counterparts from the Government of Georgia, in particular theMinistry of Economy and Sustainable Development and the Min-istry of Finance (MoF), as well as various stakeholders, includingrepresentatives of the private sector and the European Commis-sion (EC) delegation in Tbilisi with whom the preliminary findings ofthis report were shared and discussed. The authors are especial-ly thankful to the National Statistics Office of Georgia (GEOSTAT)for an extremely effective and productive collaboration on the datacollection for the Technology Adoption Survey and their willingnessto share anonymized firm-level data, which allowed the authors toperform most of the analysis presented in this report. Abbreviations Figures Contents01 Chapter 1BENCHMARKING AGGREGATE GREENOUTCOMES, INSTITUTIONS, ANDBARRIERS TO GREENING THE PRIVATESECTOR IN GEORGIA 1.1Aggregate Green Outcomes31.2Regulatory Framework for Energy Efficiency51.3Stakeholders, Policies, Strategies, and Legal Framework8 Chapter 2DECOMPOSING THE DRIVERSOF ENERGY CONSUMPTION 2.1Descriptive Statistics222.2Energy Consumption and Emission Decompositions232.3Energy Consumption Decomposition Results26 Chapter 3ENERGY EFFICIENCYIN GEORGIA: A FIRM-LEVELANALYSIS 3.1Heterogeneity in Energy Efficiency between Firms363.2Evolution of Energy Intensity over Time393.3A Thought Experiment to Improve the Targeting andFocus of Green Policies40 4866 Chapter 4TECHNOLOGY ADOPTION, INNOVATIONAND ENERGY EFFICIENCY 4.1The Data494.2Green Energy Sources514.3Green and General Technology Adoption534.4