Impact Assessment of Measures to Support Sustainable Energy Investment in the Garment Sector

At a Glance

Publication Date December 2021
Format pdf
Country Cambodia
Thematic Areas Sustainable Energy, Cross Cutting, Solar Energy, Circular Economy, Renewable Energy, Green Growth

The Switch Garment project “Promotion of Sustainable Energy Practices in the Cambodian Garment Sector” is a four year project (2020-2024) by the Global Green Growth Institute (GGGI), Geres and Textile, Apparel, Footwear & Travel Goods Association in Cambodia (TAFTAC). The project is funded by the European Union via the EU SWITCH-Asia Programme.

The project supports garment manufacturers in Cambodia in the adoption of sustainable energy practices and aims to facilitate improved access to finance to realize energy efficiency (EE) and renewable energy (RE) interventions. The goal is to reduce environmental impact of production as well as production cost and to enhance competitiveness of factories and of the Cambodian garment sector as a whole in the global supply chains.

As a policy tool, the Switch Garment team together with the Textile, Apparel, Footwear & Travel Goods Association in Cambodia (TAFTAC) has designed a ‘Model Green Factory Program’ (MGFP) in line with current and expected government laws and regulations, to be proposed to the Royal Government of Cambodia (RGC). This program will be an initiative driven by the garment industry under the leadership of TAFTAC with the aim of advocating for clean energy policy actions in the sector. While the program will be seeking government support for this policy vehicle, it is ultimately regarded as an industry initiative.

For the proposed MGFP and its possible intervention setups, an impact assessment (IA) is to inform the ideal regulatory scenario to support sustainable energy investments in the Cambodian garment sector. The MGFP consists of four compliance areas, from technology and equipment retrofits to environmental factory management processes. At its core, the IA is conducted with a simulation model that can show the impact of a specified intervention on several impact areas including social, economic, and environmental aspects. Key factors considered in the formulation of MGFP scenarios are the level of defined technical standards within the compliance elements (e.g. represented by the improved energy efficiency over the baseline), the time frame (e.g. represented by the trajectory to follow to comply with the standard assumed), supporting incentives (e.g. estimated based on the cost of complying with the standard, and the impact it would have on profitability) or the extent of standard enforcement (e.g. represented by the creation of a scenario that would represent full adoption of the standard by a given year).

The model analyzes the impact of intervention measures in the following areas: (i) overall economic, social, and environmental impact, (ii) garment sector competitiveness in terms of production efficiency, product sustainability value addition, etc., (iii) different types of firms that work in a business environment of low, medium, and highly value addition, and (iv) general impact on businesses in the garment sector – broken down by the relevant variables size of factory, value segment and type of produced

This publication is produced with financial support from the European Union through the EU SWITCH-Asia Programme. The content and opinions expressed herein are those of the author(s) and do not necessarily reflect the position or policy of the EU or SWITCH-Asia and no official endorsement should be inferred.