Greening Firms in Georgia - Technical Report

Climate change will likely be the most critical threat to private sector resilience in the coming years. Despite Georgia’s relatively small contribution to global carbon emissions, the country has experienced significant growth in emissions over the past 15 years, showing no signs of decoupling emissions from gross domestic product (GDP) growth. The private sector (agriculture, industry, services, transport and commercial buildings) is a major contributor to the growth of these emissions, primarily due to energy consumption, leaving significant room for reducing greenhouse gas (GHG) emissions through improving energy efficiency and upgrading technology. The green transition can help Georgia access global markets and have a more prominent role in global value chains, fueling export growth. In addition to boosting efficiency and access to global markets, Georgia needs to make efforts to transition toward more sustainable growth processes, given its interest in becoming an EU member. But despite the urgency of making the private sector more energy efficient, little is known about current energy efficiency levels within and across industries and the sources and barriers that affect firms’ decisions to become greener. This report uses very detailed firm-level data collected by GEOSTAT that links information on energy consumption with technology adoption data to shed some light on these question.