Energy poverty in a global context May 2011, Bastiaan Teune, SNV Renewable Energy Sector Leader Lao PDR 1

Transcription

1 Energy poverty in a global context May 2011, Bastiaan Teune, SNV Renewable Energy Sector Leader Lao PDR 1 bteune@snvworld.org This is a paper for the FAO Sustainable Bioenergy Symposium on the 2 nd of June 2011 in Bangkok. Abstract Energy poverty prevails for half of the world s population and is posing severe consequences for especially women s livelihoods. Through programs of mass dissemination of appropriate household technologies, like improved cookstoves and domestic biogas, this situation can change dramatically. Finance from sources such as ODA, national governments and carbon schemes are needed to significantly tackle this major challenge. A vulnerable world by day From a far distance the earth looks different from how we know it; without the visible presence of humans, country borders, politics, religions and differences in welfare. No evidence is shown of the major global challenge we face today: poverty, energy and climate change. In the instruction of the Oscar winning documentary The Inconvenient Truth, Al Gore says The picture below was taken on the last Apollo mission, Apollo 17. This one was taken on Dec. 11, 1972 and it is the most commonly published photograph in all of history. And it is the only picture of Earth from space that we have where the sun was directly behind the spacecraft so that the Earth is fully lit up, and not partly in darkness. (Al Gore, Inconvenient Truth, 2006) This picture brought forward a public sense of concern and vulnerability of our planet and has stimulated environmental consciousness around the world ever since. 1 SNV Netherlands Development Organisation is an international development organisation of Dutch origin with over 40 years of experience in Africa, Asia, Latin America, and the Balkans. Page 1 of 10

2 Energy poverty made visible by night But when the sun is on the other side of the earth and night falls in, all of a sudden the presence of humans becomes very visible indeed. When someone looks from outer space at the world by night, one would easily detect our existence and may conclude the human population is settled conveniently around the spots of light. Page 2 of 10

3 But when projecting the individual humans around the globe, the stunning conclusion is that one third of its population does not have access to electric light. When zooming-in on the use of thermal energy however, one will conclude that almost half of the people are cooking on traditional fuels instead of the modern sources like gas and electricity. Renewable energy and domestic biomass fuels According to the 2010 Survey of Energy Sources by the World Energy Council, 13% of the global energy consumption is regarded as renewable. Page 3 of 10

4 Of the share renewables, close to 50% is coming from biomass fuels for domestic use. Although debatable if all this biomass can be considered renewable, it accounts for six percent of the global energy consumption. Smoke, the killer in the kitchen Those who cook on traditional fuels such as wood, charcoal and dung suffer from smoke that is polluting the air in the kitchen and living areas. Therefore especially women are likely to fall prey to respiratory diseases, causing the premature death of 1.5 million each year, surpassing the number of victims from malaria. (Whereas malaria thanks its name to bad air as people used to believe this to be the cause of it.) s Collecting fuel takes considerable time investments Page 4 of 10

5 Every single day energy-poor families need to collect wood for their cooking and heating needs. This takes considerable time and results in high opportunity costs to make a better living. According to an assessment made in the Poor People s Energy Outlook 2010, there are families in Nepal that need 40 hours per week for collecting fuel wood. Common cooking practice in developing countries, (SNV, Savannakhet, 2011) Access to energy vis a vis development In this light, the world community recognizes this unequal access to modern energy services and understands its negative impact on development. In the year 2000 the UN set the Millennium Development Goals to half poverty by Universal energy access is a key priority on the global development agenda. It is a foundation for all the MDGs. (2010, United Nations Secretary General, Ban Ki Moon) One delegate at the 2010 Ashden Award ceremony in London put it this way: Lack of access to modern energy is not the result of poverty; it s the cause of it. Global warming and the Clean Development Mechanism Gore s Inconvenient Truth made very explicit that global warming is taking place and that it does jeopardizes the future life on earth for humans. Global warming is now widely acknowledged to be the result of anthropogenic emissions. To mitigate those emission the Clean Development Mechanism was put in place under the Kyoto Protocol in The Clean Development Mechanism allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized countries to a meet a part of their emission reduction targets under the Kyoto Protocol. The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets. (May 2011, Clean Development Mechanism does not reach the energy poor However, as the pie diagram below shows, so far the mechanism bypasses all least development countries (LDCs) with their small industries and few polluting activities. Page 5 of 10

6 The potential in LCDs is for small scale household technologies such as cook stoves, domestic biogas and perhaps pico hydro and solar home systems. Those technologies simultaneously reduce GHG emissions and increase the livelihood of those who are most vulnerable for the consequences of global warming. However, 74% of the registered CDM projects occur in just four countries. China, India, Brazil and Mexico are on the brink of becoming complete developed countries. Besides only a marginal number of projects have bearing to household energy technologies such as improved cookstoves and domestic biogas. Energy poverty insufficiently addressed Energy poverty is not only neglected under the CDM, also in many energy policies energy poor households are often left out. The earlier mentioned Survey of Energy Sources 2010 has 618 pages, the word cooking is mentioned only eight times. The 338 pages IEA International Energy Outlook 2010 does not mention cooking and stoves just seven times. Also national energy policy documents often fail to address household energy properly. Although in Laos 99% of the population uses wood and charcoal for cooking, the draft Renewable Energy Strategy for Laos mentions cooking only 10 times, stoves four times, whereas on the other hand electricity is mentioned 40 times. For big players like the World Bank, (renewable) energy is equivalent to grid electricity rather than thermal energy for cooking. Mass dissemination Page 6 of 10

7 In order to address the issue of energy poverty, and to mitigate the risks and disadvantages associated with it. To meet the energy needs around the developing world, having in place solid mass dissemination initiatives of appropriate household technologies is paramount. There are a number of successful initiatives in the South East Asian region, and SNV successes on domestic biogas dissemination are elaborated in more detail. SNV has set up national biogas programs in seven Asian (and eight African) countries, and by the end of 2010 that facilitated the construction of 355,998 domestic biodigesters. This results in better living conditions in terms of health and environments for over 1.7 million people, creating jobs for tens of thousands. Country Programme commenced in 2010 Cumulative up to 2010 Asia Nepal , ,356 Vietnam , ,767 Bangladesh ,688 15,707 Cambodia ,744 10,146 Lao PDR ,966 Indonesia ,316 1,366 Pakistan Total Asia 355,998 It follows the multi-stakeholder sector development approach which aims to build on organisational and institutional capacities already available in the country. SNV helps to strengthen these capacities though its advisory services. It is vital to establish and optimise cooperation between all actors involved. The programs should finally result in a commercial viable biogas sector, with companies acting as suppliers to address an active demand from households who are able and willing to invest. Page 7 of 10

8 National programs on domestic biogas aim to a range of functions that need to be executed in a coordinated manner. Whereas, for instance, the function of operation & maintenance of a biogas plant will be carried out by the households, other functions should be undertaken by other stakeholders like micro finance institutes, training centers, extension workers, research institutes, etc. The result of the cooperation between institutions is that the biogas sector is supported by various stakeholders, creating a robust framework for prolonged and massive dissemination. See for more information the booklet Building Viable Domestic Biogas Programmes; Success Factors in Sector Development at Finance Access to capital is a prerequisite to support and develop dissemination programs that tackle energy poverty. In order to reach large numbers of households often a balance is found in the spectrum between a fully subsidized and a free market approach. The free market approach is not feasible where consumers are able to pay only part of the real costs, so that public finance is required to sustain the dissemination scheme. Therefore ODA and government funding need to support and finance those parts in the costs that cannot be financed by the end user and is justified by the public benefits it brings about like for instance health, environment and job creation. In many cases households that are willing to make an investment rely on the provision of micro credits to lower the financial trash hold of the initial investments costs. Since 2010 the annual volume of carbon finance transactions is bigger than the total ODA, of some 300 billion USD; (almost the same figure as the global subsidy on fossil fuels.) The global need to substantially address energy poverty is estimated on 36 billion USD per year, out of which less than 10% is needed for clean cooking facilities. (IEA/UNDP/UNIDO, 2010) Page 8 of 10

9 Carbon methodologies and procedures have to allow projects that are disseminating household technologies. Clearly upfront investments are needed as carbon revenues take some years to be generated. Guarantee funds may attract private investors in this underdeveloped and innovative part of the carbon business. Positive highlights There are profound positive developments going on that point in the direction of including those that are till now left in the dark. There are clearly a number of opportunities and developments that help to address energy poverty in the world, to name just a few: 1. As expressed by Ban Ki Moon, access to modern energy services has the attention of those concerned with the Millennium Development Goals 2. Successful and sustainable large scale dissemination initiatives have proven to be possible in a number of countries in a variety of technologies. Let us learn from those and build further on them or replicate it elsewhere. 3. Increasingly micro finance institutes such as Acleda in Cambodia, Agricultural Promotion Bank in Laos, many micro finance institutes in Bangladesh and Nepal do lent for household energy technologies to hundreds of thousands. Even though not considered profitable, it does save money and payback defaults are low. 4. Under the CDM, the avenue of Program of Activities has been established to open up the market for the segment of very small carbon projects. This is a mayor step forward, embraced by development bank like for instance KfW. 5. The SNV supported National Biogas Program is now already in process of validation under the GS voluntary carbon scheme. 6. Initiatives like Nexus link private investors with carbon projects in the field of household energy technologies and enable private equity to take care of the initial costs needed for such programs. 7. The Global Alliance for Clean Cookstove was launched last year, with high level political support and aiming at 100 million cookstoves by The ADB manages the Energy for All initiative that aims at providing modern energy services to 100 million people in Asia by Increasingly big companies whish to compensate their GHG emission through renewable energy projects for households for its environmental and social benefits. 10. The eminent gender dimension of household energy, climate change and carbon finance are in length addressed by the lobby activities of networks like Energia and others. 11. The IEA will devote a special excerpt of the 2011 World Energy Outlook on Energy for all: financing access to the poor. Page 9 of 10

10 12. Changing weather patterns leading to storms, floods and droughts will increase the public attention to act and will be the driving force to take measures, hopefully via the inclusion of more household technology programs. Conclusion Considering its scope and magnitude, household energy should not be part of the exclusive domain of specialists and NGOs, but deserves a profound place in the common national and international discourse of (renewable) energy, poverty and carbon mitigation. In order to address energy poverty significantly, mass dissemination programs are needed to reach those who are currently lacking access to modern energy services. To roll out and replicate successful initiatives, access to public finance like ODA, national budgets and carbon is urgently needed to open up for such initiatives. References IEA 2010, International Energy Outlook 2010 IEA/UNDP/UNIDO 2010, Energy Poverty, How to Make Energy Access Universal? Ministry of Energy and Mines 2010, draft Renewable Energy Development Strategy in Lao PDR Practical Action 2010, Poor Peoples Energy Outlook 2010 SNV 2009, Building Viable Domestic Biogas Programmes; Success Factors in Sector Development World Energy Council 2010, 2010 Survey of Energy Resources Page 10 of 10