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Is Climate Policy Endangering Efforts to Address Energy Poverty?

by Michael Levi
June 9, 2011

A few weeks ago, I had the privilege of spending a day with people from around the world who are deeply involved in trying to deliver electricity to the nearly two billion people who lack it. I learned a lot, but I was struck by one pattern: a large fraction of the people and countries working to expand energy access seem to be shaping their initiatives so that they can tap into the hundred billion dollars a year of climate-related funding that developed countries have promised they’ll try to mobilize by 2020. In practice, this means that many appear to be tilting their energy access efforts strongly toward renewable energy and away from fossil fuels, and toward dependence on a yet-to-be-created Green Climate Fund. These are dangerous trends.

Why? For starters, the $100 billion per year remains very much aspirational. It would be unwise for anyone to bet their energy access and poverty reduction agendas on it materializing. Moreover, even if it did come through, I’d expect a large fraction of it to be delivered through carbon makets, i.e. offsets. Those flows will go primarily to advanced developing countries that have the capacity to establish large and robust carbon markets at home; alas these are not, in general, the countries that tend to lack access to electricity. The bottom line is that energy-poor countries should not be counting on climate funds to save them.

This concern might be moderated if a big shift in energy access efforts to focus to renewables made sense in its own right. But it doesn’t. Don’t get me wrong: renewables are often the most cost effective way to deliver energy access, particularly to remote populations. Often, though, they’re not. Sometimes diesel generators or very small oil burning power plants (connected to mini-grids) will be the best bet; sometimes connection to the broader grid, which might ultimately be fed by big coal or gas fired power plants, will make the most sense. And with funds for delivering energy access scarce, this sort of cost effectiveness calculation matters a lot. Moreover, as countless people have shown, the choice of fuels for bringing electricity to those who don’t have it will make almost no difference to climate change; there is no significant climate-based reason to tilt energy access efforts strongly toward renewable.

The fact that nearly a quarter of the world’s people don’t even have a light bulb is tragic. But it is even worse that we appear to be steering some of those who might help them onto potentially inefficient and counterproductive paths. I am as quick as anyone to object to people (like Bjorn Lomborg) who argue that confronting climate change robustly will come at the expense of dealing with poverty. If we don’t guard carefully against unintended side effects of our climate policies, though, that may be precisely what we do.

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  • Posted by David B. Benson

    On the contrary, those with little money simply cannot afford price jumps for petroleum based fuels. In the semitropics and tropics several different groupings have noticed the advantages of growing Jatropha for its oil. Jatropha oil can either run a slightly modified diesel engine or else be readily refined into biodiesel for an ordinary diesel engine. I know of two village (groups) in India with use one or the other of these ideas to provide a modest supply of electricity in the early night. I know of a more ambitious project in Mynamar (Burma) to provide biodiesel to heavily suppliment purchases of diesel for transportation fuel.

    In summary, the poorest can no longer afford petroleum products. Look to other sources for electricity and transpotation fuels.

    [ML: It depends strongly on the details of the particular situation. Price jumps are only unaffordable relative to non-fossil options if the prices are similar to start with. Whether that’s the case depends on the specific situation.]

  • Posted by Neha Misra

    Agree that relying on climate related funding for improving energy access is not the best strategy. The funds can provide some additional resources for the carbon benefits so generated ( which in case of distributed generation projects at micro-level like solar lanterns are not most easy to aggregate and get credits for anyhow) but that’s only one part of the larger energy access solution with many other nuts and bolts that need to be in place.

    Don’t quite agree about small scale diesel generators and small oil burning power plants to be the best bet in the long run for any case for rural electrification really. For one, as David rightly points out – the poor can’t afford the rising cost of petroleum. Solar Sister works with communities across Africa to provide them with portable solar lighting and mobile phone charging solution ( their very first step to the clean energy ladder as humble as that may be). We hear from communities every day how kerosene is not even within their reach now due to rising costs.Using Diesel or other petroleum based products like kerosene is not only a matter of the contribution to the global CO2 emissions but also of public health. According to the World Health Organization, Indoor air pollution due to use of kerosene lanterns and other fuel based lighting sources, for example, is the cause of millions of deaths each year -one in every 20 seconds according to one WHO estimate. So I think it is important to keep all these costs in mind. Renewable energy solutions – portable solar products for starters do make sense ( economic, environment, health) to bring light to those who don’t even have a basic light bulb. Ofcourse, there is no one silver bullet and long term sustainability depends on a diversified basket of energy solutions which can be affordable, reliable and good for health of both planet and people!

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