The UN Summit on the Millennium Development Goals will assess the progress made—and what further action is needed—by the international community to reach targets by 2015. But another area of critical focus is the “missing MDG”: providing electricity to the 1.5 billion people who do not have access to modern energy.
The case for linking energy access to achieving the MDGs is counted by the hours that women and children spend gathering agricultural residue and dung for fuel; by the toll of respiratory illnesses caused by indoor air pollution; and by the frustration of small business owners who cannot expand business because of the lack of reliable energy. Lack of basic access to energy affects over 550 million Sub-Saharan Africans, mostly living in rural areas but increasingly found in the fringes of rapidly growing cities; over 600 million people in South Asia, mainly living in rural India; and significant but dispersed pockets of poor in other regions, including in middle-income countries that have been bypassed by the grid. The broader energy crisis in Africa, (documented by the Africa Infrastructure Country Diagnostic project), with 30 countries facing chronic blackouts and universal energy access seemingly more than 50 years away, makes the challenge particularly stark. It is critical to note that achievement of universal basic energy access will not drive further global temperature increases. It is estimated (pdf) that emissions would only increase by 1.3 percent above current levels.
Movement toward providing universal access to modern energy services could be an important building block in bridging the large trust gap in the global climate negotiations. This gap has many causes, but suspicion looms large that the climate agenda will divert resources from critical needs like energy access. Developing country leaders are concerned that their efforts to expand energy access will be complicated by calls to focus only on low-emission solutions, without the needed climate finance to ensure that these are affordable. The Least Developed Countries worry that the cost of adapting to climate change (most recent World Bank estimates puts this cost at $14-17 billion per year for Africa alone) will divert resources away from the provision of basic services like modern energy. A strong push now to close the energy access gap will send an important signal to climate negotiators that their very real concerns have been heard.
While the provision of basic energy services to the poor will not exacerbate the climate crisis, least developed countries should not miss out on the opportunities for transformation resulting from the clean energy revolution. Often in partnership with the private sector, new opportunities for expanding cleaner energy supply can arise, including technologies like hydropower or transitional fuels like gas. Others energy sources, like geo-thermal, are reaching affordability but financial and capacity barriers still need to be addressed. Leap-frogging to bottom-up, distributed energy solutions like mini-grids supported by renewable energies like mini-hydroelectric and solar photovoltaics (PV) can bring down otherwise prohibitive costs of serving dispersed communities. This is especially critical given the low income levels of poor families. Others solutions will require more tailored incentives, including feed-in tariffs to attract investment in scaled wind farms; significant climate-financing support to scale up concentrated solar power initiatives where costs are still prohibitive, especially for developing countries; and R&D partnerships to accelerate testing of carbon capture and sequestration for countries where coal is abundant and likely to remain the least costly solution. In all cases, plans for new generation to support the grid need to be accompanied by energy efficiency strategies.
As stated above, the private sector can play a strong role. Entrepreneurs are innovating and finding new energy solutions: clean cooking stoves, low-cost solar solutions in dispersed settlements, and distributed energy systems for tomorrow’s “green” cities. Other solutions will require large capital investments, yet today’s global economic conditions make capital in relatively riskier settings scarce. Public-private partnerships, supported by multi-lateral guarantees, and more accessible climate finance to buy down the costs and risks of new technologies, can help. An example of this is the Scaling-Up Renewable Energy for Low-Income Countries program, one of the initiatives from the Climate Investment Funds. It is providing $284 million in subsidies to scale up and accelerate use of renewable solutions in six pilot countries, acting as a catalyst for transforming renewable markets.
Finally, meeting the energy access challenge will require well-recognized, good practice public policy. There is no substitute for good governance and for a supportive policy framework. Targets and results measurement, capacity development and enabling legislation to support rural electrification and clean energy solutions, strong social and environmental standards, and utility reform, will all be critical. And reforms to pricing regimes that eliminate tariff subsidies for the well-off while re-directing support to investments in servicing the poor will be essential.
As delegates to the MDG Summit debate ways to accelerate action to improve the lives of billions of poor people, universal energy access will make its way onto the agenda. Expect calls over the next year, bolstered by the UN Secretary General’s Advisory Group on Energy and Climate Change report, Energy for a Sustainable Future (pdf), for a big push toward universal energy access by 2030. It is time—or in fact, overdue—that we recognize that meeting the MDGs and taking action on global climate change will not be achieved without bringing modern energy services to the poor.