McKinsey published another thought leading piece on the potential value add investing in Energy Efficiency projects (McKinsey, July 2009). Their NPV calculation, excluding program costs, stands at $1.2tr. Net-Net the NPV comes down to some $600bn – still worth accepting one would think.
The McKinsey team comprising the report (Hannah Choi Granade, Jon Creyts, Anton Derkach, Philip Farese, Scott Nyquist, Ken Ostrowski) identified three levels that generally prevent purposeful action to pursue those investments. Specifically these are (i) structural, (ii) behavioral, and (iii) availability.
The report is 165 pages long, so better get it and dwelfe into the particulars. The content is rich in information and plenty of implications and conclusions can be derived from an investment management perspective. Just make sure you read the footnotes: Assumptions are key, as always.