Universal Energy Access Eludes Some Developing Nations

Stirring Discussion over Coal and Green Energy

Ken Silverstein | Oct 02, 2012


Getting access to electricity is the main obstacle to growing economies in struggling nations. That’s why some global organizations have prioritized such electrification efforts.

Fossil fuels are the most readily available source. But UN-sponsored groups are working with private interests to usher in more green energies. While many developing countries have made great strides to electrify their economies, billions of people go without power -- or by using solid fuels such as wood to stay warm in the winter. A prosperous -- electrified -- nation will not only create jobs but will also preserve basic human dignity.

“Providing sustainable energy for all could be the biggest opportunity of the 21st century,” says the UN Secretary-General Ban Ki-moon. It "is the golden thread that connects economic growth, social equity, and a climate and environment that enables the world to thrive. This initiative is bringing together governments, the private sector, and civil society in a partnership that’s delivering real results.”

The UN-led program, called Sustainable Energy for All Initiative, has three objectives by 2030: to provide universal access to energy; to double the rate of global energy efficiency improvement and, to double the share of renewable energy in the global mix. The initiative, which launched a year ago, is boasting success, saying that more than $50 billion has been mobilized from the private sector. It also says that multi-lateral banks have committed billions of dollars to the effort.

Today, the UN says that 1.4 billion people do not have any electricity. Most of those are in Asia and Sub-Saharan Africa, where power generation is about a tenth of where it is in other poor areas. Other regions without power include swaths of Latin America and the Philippines. Based on current population trends, 1.2 billion -- or 15 percent of the world's population -- will still lack such access in 2030.

To be sure, coal is the quickest way to electrify many developing areas. But with so much emphasis on reducing greenhouse gas emissions, policymakers and bankers alike are trying to figure out how to achieve electrification using renewable energy. Because most places that lack electricity are located in rural regions, the demand could be met through on-site, green generation.

Newfound Hope

To put the matter in perspective, loans from the World Bank to renewable energy and energy efficient projects made up $3.3 billion of the institution's $8.2 billion portfolio in 2009. That’s a 24 percent increase from previous business practices. Fossil fuel investments still made up about $2 billion of its total loan portfolio. The bank says that “trade-offs” are a must. 

A news story appearing in the UK’s Guardian cites a UN official saying that a lack of electricity supplies is the main culprit for “wiping out” 2-3 percent of gross domestic output on an annual basis. Creating a reliable -- but clean -- power supply is therefore paramount.

“The World Bank Group will step up its actions in partnership with governments, the private sector and civil society, mobilizing its financing, policy expertise and convening power to achieve these goals,” says Jim Yong Kim, head of the bank. His reference is to the UN’s initiative, which is to increase green energy and energy efficiency measures while providing universal energy access.

Perhaps the goal of bringing electricity to the masses and the cause of reducing the level of heat trapping emissions are inconsistent with one another? With the world economy projected to grow four-fold over the next four decades, the potential to increase carbon releases is real.

Ironically, the Organization for Economic Cooperation and Development says that poorer countries will have twice the level of carbon emissions as those of their more prosperous brethren. That's because the richer countries will have access to the most modern pollution control equipment while those in the developing nations will rely on cheaper coal-fired power.

Already, China and India use coal to meet most of their power needs. But their economies are in growth mode, prompting them to use increasing amounts of greener fuels and nuclear energy. To keep up the pace, they need to attract western investors and modern technologies.

“The private sector is a crucial partner in this (UN) initiative and is fully ready to participate in this new platform and build on the tremendous results achieved to date,” says Chad Holliday, chair of the Executive Committee of Sustainable Energy for All.

The UN has a noble but daunting goal. Success would mean improving the quality of life for billions. The local job base would then expand while growing economies and giving the now-impoverished a sense of hope.

EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been named one of the Top Economics Journalists by Wall Street Economists.

Twitter: @Ken_Silverstein


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Extortion from the poor?

This may sound so very noble. But there seems to be no end of ways to push this expensive, and lucrative to developers, product. It would be better to care for the poor by furnishing methods of producing food, by building cheap power plants so that basic health needs could be met. Health and productivity demand simple reliable cheap power. Honduras residents still burn sticks in their ovens in the capital city creating asthma health problems. Many have no lights. If anyone really cared, you would supply the basic needs first. Not jump to selling them intermitant unreliable electricity at a high price: snake oil salesmen extorting from the poor.