| Abstract: | The citizens of Poland, Eastern Germany, Czechoslovakia, Hungary, and Romania inhabit perhaps the most polluted environments in the world, largely because of their countries' inefficient use of energy. Energy use is two to three times greater per unit of economic output than in Western Europe. Energy inefficiency also constrains economic growth by diverting capital to unproductive use. As much as 40% of all industrial investment in Poland was consumed in energy production.The emerging democracies of Eastern Europe have embarked on reforms to make their economies more efficient. We assess their potential for energy efficiency and apply end-use analysis in an energy end-use economic model to evaluate future energy use in the region. We assume that Eastern Europe will approach current Western living standards over the next three decades and that this will in turn increase energy consumption. We have found, nevertheless, that Eastern European nations could hold energy demand virtually constant through structural reform and technical energy-efficiency improvement. The six countries in the region could save as much as 3.5 exajoules per year, with savings yielding an economic benefit of $300 million annually.Capturing the energy-efficiency potential in Eastern Europe would require a combination of market forces and policy initiatives. Such optimistic prediction, however, should not be taken at face value. Financial and technical constraints will impede some of the potential gains in energy efficiency in Eastern Europe. Overcoming them will require national leadership and decisive international cooperation. |
