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Energy is a basic necessity for human activity and economic and social development. Yet global strategies for how to meet this basic need for the world's rapidly growing population are sorely lacking. Lack of energy services is directly correlated with key elements of poverty, including low education levels, restriction of opportunity to subsistence activity, and conflict.
Despite great success in reducing poverty, it remains one of today's most pervasive global issues. Nearly one-half of the global population - 3 billion people - live on less than $2 a day, and one fifth of the world population - 1.5 billion people - live in extreme poverty on less than $1 a day. Eradicating poverty, however, requires more than advances in income. Human Development Report 1997 put forth a definition of "human poverty" that sees impoverishment as multidimensional, going beyond lack of material wealth. "Human poverty is more than income poverty - it is the denial of choices and opportunities for living a tolerable life."[1] Poverty means more than a lack of what is necessary for economic well-being. Poverty manifests itself in the deprivation of people's lives in the denial of the opportunity.
The shift in thinking about development issues in terms of human development is thanks, in large part, to economist and philosopher Amartya Sen and Martha Nussbaum, who have long advocated a softer, ethical approach to international development. A focus on freedom and capability directs attention to the ends that make development important, rather than merely to some of the means that, inter alia, play a part in the process. Poverty must be addressed in all of its dimensions, not simply income.
Sections
The Energy-Poverty Problem
Access to energy services is a key component of alleviating poverty and an "indispensable element of sustainable human development," according to the International Energy Agency (IEA). "Without access to modern, commercial energy, poor countries can be trapped in a vicious circle of poverty, social instability and underdevelopment. During the past twenty-five years, electricity supplies have been extended to 1.3 billion people living in developing countries. Yet despite these advances, roughly 1.6 billion people, which is one quarter of the global population, still have no access to electricity and some 2.4 billion people rely on traditional biomass, including wood, agricultural residues and dung, for cooking and heating. More than 99 percent of people without electricity live in developing regions, and four out of five live in rural areas of South Asia and sub-Saharan Africa . The health consequences of using biomass in an unsustainable way are staggering. According to the World Health Organization, exposure to indoor air pollution is responsible for the nearly two million excess deaths, primarily women and children, from cancer, respiratory infections and lung diseases and for four percent of the global burden of disease.[2] In relative terms, deaths related to biomass pollution kill more people than malaria (1.2 million) and tuberculosis (1.6 million) each year around the world. Despite advances in areas such as rural electrification, the number of people lacking access to energy services has remained relatively constant due to increases in population. The total number of people without electricity has fallen by fewer than 500 million since 1990. Without modern energy services, millions of women and children face debilitating illness or premature death; basic social goods like health care and education are more costly in both real and human terms, and economic development is harder to perpetuate. The services that energy enables, such as electricity, can create conditions for improved living standards, especially in areas of public health, education, and family life.
Absent radically new innovations in global energy policy, by 2030, 1.4 billion people still will not have access to electricity under a business as usual scenario, while the number reliant upon biomass should increase from 2.5 billion in 2006 to 2.7 billion by 2030 (IEA 2006). This means that without drastic intervention between now and 2030 by a partnership of the corporate sector and the international aid community, one third of the world's population will still be using unhealthy and environmentally damaging fuels to meet their need for daily sustenance thirty years hence.
The demand for energy is a derived demand because its value arises from its ability to provide a set of desired services. When combined with energy-using capital equipment, energy provides the work necessary to produce goods and services in both the household and in industry. Modern energy, especially electricity, allows the introduction of relatively low cost capital goods such as tools and sewing machines that can have a major impact on labor productivity (and hence living standards).
Because most economic studies on global poverty focus on the provision of finance and education to create economic activity, the role energy services play in alleviating abject poverty and promoting sustainable development has not been clearly identified.
Although it is clear that people demand more energy as their incomes rise and that increased use of modern energy by households is a key element in the broader process of human development, the shift from traditional to modern energy sources - the energy ladder - is not a smooth one. When a country's per capita income is less than US$300 per day, approximately 90 percent of the population uses fuelwood or dung for cooking. Once incomes have exceeded US$1000 per capita, most people switch to modern fuels and substitution is nearly complete.[3] As electricity becomes available, it is first used for lighting and communications. Only later, as per capita income permits, is it used as a source of power and energy for other domestic purposes.
Energy Ladder: Household Fuel Transition
Note: ICT is information and communications technology.
Source: IEA Analysis, World Energy Outlook 2002.
As per capita incomes increase, the transition to commercial energy sources, which include natural gas, petroleum products and electricity, does not simply represent a substitution of more convenient and expensive fuels for cheaper traditional fuels. Commercial energy sources also permit the use of modern technologies that transform the entire production process at the factory level, in agriculture and within the home. The resulting increase in productivity generates higher incomes and increases the ability of people to explore and develop their capabilities.
Electricity allows tasks previously performed by hand or animal power to be done much more quickly with electric powered machines. Electric lighting allows individuals to extend the length of time spent on production and hence on income producing activities. It also allows children time to read or do homework and access to television and film, which opens rural residents to new information that can instill the idea of change and the potential for self -improvement. Modern liquid fuels permit modern modes of transportation that cut the cost, both monetary and in time, of travel to nearby towns where, again, individuals are exposed to different ways of doing things and different views. Faster and cheaper transportation can increase the reliability of supply of modern fuels, reducing the need to maintain supplies of firewood as a back up and facilitating movements up the energy ladder.
The United Nations, Energy and Human Development
The importance of energy services was first widely acknowledged in 1986 by the World Commission on Environment and Development report Our Common Future , also known as The Brundtland Report . In 2000, the United Nations, through its Commission on Sustainable Development, returned to this issue with the publication of two major reports: The UN Development Program's World Energy Assessment: Energy and the Challenge of Sustainability and the UN Economic and Social Council's "Ad Hoc Open-Ended Intergovernmental Group of Experts on Energy and Sustainable Development."
As result of its early attention to this critical subject, the UN has described expanding access to sustainable energy services as essential to bringing its Millennium Development Goals (MDGs) to fruition. A 2006 report entitled Energy Services for the Millennium Development Goals notes that "without increased investment in the energy sector, the MDGs will not be achieved in the poorest countries."
In support of the MDGs, the UN Development Program's work centers upon "six thematic practice areas, selected because of developing country demand: poverty reduction, democratic governance, sustainable energy and the environment, crisis management, ICT, and HIV/AIDS." Access to energy is a component part within UNDP's approach to sustainable energy. UNDP's priorities on sustainable energy involve: (a) s trengthening national policy frameworks, (b) promoting rural energy services, (c) promoting clean energy technology, and (d) increasing access to financing for energy.
Micro-energy applications at the community level have recently been examined in the UNDP study Expanding Access to Modern Energy Services: Replicating, Scaling Up and Mainstreaming at the Local Level (2006). Achieving many of the UN Millennium Development Goals by 2015 will be extremely difficult without increasing access to affordable, cleaner, and safe energy.[4] In order to halve the number of people living on less than $1 per day, there is a concomitant need to reduce the number of people who lack electricity services by some 560-600 million. The investment required to provide electricity service to these people may be in the order of $200 billion.
Community-based efforts aimed at improving localized access to energy services may be able to learn from activities undertaken through the Millennium Villages Project (MVP), now folded into a new NGO called Millennium Promise. The MVP approach includes farm inputs, health services, safe water, latrines, professional training, motor vehicles for village use, on-grid or off-grid electricity and better roads. Moreover, a study conducted by Winrock International in Nepal, Report on Assessment of Rural Energy Development Program-Impacts and Its Contribution in Achieving MDGs , affirms that "co-investment in improved health and educational services, telecommunications, in productive enterprises and infrastructure, are needed to make access to energy [a] more powerful element for development" (2007).
Energy Poverty and Conflict in Oil Producing Countries
The question of sustainable development for communities living amid oil and gas production is also one of critical importance. Increasingly, certain national and state governments, local leaders, and energy companies have been accused by human rights monitors of practicing a deleterious form of "petro-politics" in which local communities bear the brunt of devastating oil spills and grossly inadequate public services-without benefiting in tangible ways from resource extraction on their lands. To the extent that local populations feel, as did the indigenous peoples of Bolivia, that they will not share in the economic benefits of oil and gas development but will be left with environmental and other social burdens, their support for such development may be denied, creating license to operate issues for potential oil and gas investors and potentially worsening the shortage of global energy supply.
An extreme case is the Niger Delta where severe deprivation has prompted local opposition leaders to resort to violent tactics. Ironically, while substantial oil profits are being collected by the government and foreign investors, numerous local communities near oil facilities typically lack electricity and running water. This situation is creating damaging humanitarian crises and political conflicts. Other such conflicts have been seen in Aceh , Indonesia , where natural gas exports were interrupted by violent protests among indigenous people. This risk of violence in oil producing communities is yet another side to the energy poverty and sustainability question, one that might be addressed by corporate partnerships with government and multinational aid agency partnerships in development assistance.
Research Goals
The Baker Institute research project on "Poverty, Energy and Society" is meant to provide economists, corporate leaders and development aid professional with a useful model for understanding and identifying the link between energy and poverty and empirical analysis of possible solutions for the provision of sustainable energy through well-designed development assistance programs as well as localized commercial initiatives for distributed energy. By identifying the most efficient, existing energy alternatives, the institute also hopes to better inform policymakers and international development agencies with a clearer understanding of why energy is vital to sustainable development and which avenues have proved most effective in the provision of energy services in developing countries including the poorest rural communities. In addition, the institute plans to use this study as an educational tool to enhance the public's understanding of the link between energy and poverty and its potential to alleviate many of the challenges facing developing countries.
Topics
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Citations
[1] UNDP, Human Development Report 1997 (New York: UNDP, 1997), 2.
[2] Nigel Bruce, et al., "Indoor air pollution in developing countries: a major environmental and public health challenge," Bulletin of the World Health Organization 2000: 1078-1092.
[3] Douglas Barnes and Willem Floor, "Rural Energy in Developing Countries: A Challenge for Economic Development," Annual Review Energy Environment 21 (1996): 497-530.
[4] http://www.un.org/millenniumgoals/
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