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Faced with sharply rising energy costs in the 1970s, producers in the industrialized countries have shown that energy consumption in paper production can be substantially reduced, and that improving the efficiency of waste recovery can further decrease the requirement for purchased energy. The wide range of measures discussed in this paper include steps to improve internal energy efficiency through a variety of measures such as improved housekeeping, process modification, and water re-use, steps to improve waste utilization, and cogeneration. Preliminary analyses of the costs and benefits of such measures are included. The paper also describes the particular technical and other constraints which have so far tended to limit the introduction of similar energy-saving techniques in the pulp and paper industries of many developing countries. Proposals are included for policy and other measures which could be introduced to stimulate improvements to energy efficiency in these situations. (Copyright (c) 1985, The International Bank for Reconstruction and Development/The World Bank.)