By Alejandro Litovsky*
openDemocracySeptember 4, 2007
Around 2.64 billion people, 40% of the world's population, lack modern fuels for cooking and heating. 1.6 billion have no access to electricity, three-quarters of them living in rural areas. As decision-makers in Europe and north America wonder how to reduce energy consumption, massive regions of the developing world remain literally in the dark. Populations in the energy-poverty trap - covering vast areas of south Asia and sub-Saharan Africa - are nowhere likely to influence the accountability of the energy policies of their governments. At a high-level workshop on Energy and Democratic Leadership: Promoting Access to Energy for Poverty Reduction in Santander, Spain on 20-21 August 2007, the debate on this global energy poverty took a welcome turn towards politics. The event brought together an unusual crowd to discuss the solutions: energy-poverty experts from international agencies, civil society and energy businesses were joined by former political leaders (Mary Robinson, Jimmy Carter, Sadig al-Mahdi and other members of the Club of Madrid among them) to attempt to put the pieces of the puzzle together.
Building an energy vision
Efforts to bridge the energy gap are often fragmented internationally. Scaling up successful projects remains the biggest challenge. As Kamal Rijal, energy-policy advisor to the United Nations Development Programme (UNDP), explained in Santander: "Scaling up pilot projects requires political commitment. Reducing the risk to investors and strengthening the institutional capacity is the key to achieve scale." One illustration of the bottlenecks in the system is the African Rural Energy Enterprise Development (Areed). Areed offers rural energy entrepreneurs in countries like Mali, Ghana, Tanzania, Senegal and Zambia a combination of enterprise-development services and start-up financing; but it is finding that governments are not fully supporting these enterprise approaches because they are not convinced these are in line with their political interests or their developmental priorities (see United Nations Environment Programme/Areed, Open for Business: Entrepreneurs, Clean Energy, and Sustainable Development [2006]).
Institutional barriers to the setting up of new renewable-energy enterprises currently prevail; their competitiveness largely depends on effective regulatory frameworks and government policy. Yet renewable energy enterprises can be very competitive, as the Alliance for Rural Electrification is quick to point out, citing examples from its members such as BP Solar or the Spanish solar company Isofoton. Investment conditions for renewable energies are being improved through innovative approaches like the Sustainable Energy Finance Initiative (Sefi), which show that public-private partnerships and mobilising investors can improve the investment environment considerably. International donors, from the European Union to the UNDP are doing innovative work. The World Bank has set a target to supply 250 million Africans with clean-energy lighting by 2030. But these worthy initiatives are fragmented pieces of the larger vision which is currently lacking. Inter-agency coordination needs to improve to build synergies. Where attempts in this direction have been made, the challenge becomes to translate national and regional political consensus into long-term, sustainable investment programmes. To do this effectively, political leaders need to step in and develop robust energy strategies that link together the work and interests of the different stakeholders.
The smart-government factor
Government leaders can be visionaries and promote the uptake of renewable energy sources. For example, Algeria aims to tap its solar thermal resources to export solar energy to Europe. The Algerian government created New Energy Algeria (Neal) in 2002 to help develop its renewable resources. Neal has inaugurated the construction of a hybrid solar thermal power plant that is expected to generate 150 megawatts by 2010 and up to 6,000 megawatts by 2020. The thermal component is not expected to be economically competitive for the next ten years, but this hasn't dissuaded the Algerians from pursuing their plans. "Our potential in thermal solar power" says Tewfik Hasni, Neal's managing director, "is four times the world's energy consumption so you can have all the ambitions you want with that..." South Korea's $170 million investment to build both the world's biggest solar plant together with the largest tidal power plant is part of another focused effort to take renewable energy seriously in a national strategy.
The democratic challenge
First, they must create economic incentives for innovation - e.g. through targeted public subsidies - that benefit local entrepreneurs. Democratic leaders will face the difficult task of re-establishing energy-policy priorities, manage established interests, and an energy culture of policy-makers not used to thinking in terms of the decentralisation of energy generation. Second, they must regard a vibrant private sector as an opportunity to improve the skills and capacities of the poor. Technologies that enable poor people's independence - for example, through the use of decentralised energy generation with renewable energies - must be prioritised in electrification plans, coupled with the promotion of small enterprises. Third, public-private partnerships are likely to offer an attractive option for governments to improve their capacity while leveraging private capital and knowledge. Democratic leaders must ensure that partnerships have a strong focus on their own good governance and on capacity-building for the poor, so that private interests do not dominate over public goals. Fourth, a sustainable contribution from the private sector will depend on a framework of good governance of the energy sector, one that can guarantee the rule of law, transparent accounts and decision-making, and a fight against corruption.
Infrastructure has increasingly been delivered through public-private partnerships over the past decade; but as Ricardo Lagos (Chile's former president, head of the Club of Madrid, and current United Nations special envoy for climate change) argued in Santander, governments must lead and not relinquish their responsibility in these initiatives: "This is a political discussion... the role of governments remains essential even if it needs to work with the private sector."
A new political leadership based on a collaborative ethos
Identifying and understanding energy solutions requires stakeholders to come together - both on a high, transnational level and in country-specific contexts - to discuss and commit to a common policy vision and strategy to address energy poverty. As Mary Robinson, Ireland's former president and head of Realizing Rights: The Ethical Globalization Initiative, told the Club of Madrid meeting: "We need to help facilitate multi-stakeholder partnerships in developing countries to link the bottom and the top - governments and investors to communities and social entrepreneurs."
The single most important message of the Santander workshop is that democratic leaders need a stronger and more coherent vision to address energy poverty. By bringing the different players to the table, political leaders can benefit from ripe opportunities available to them to scale up current approaches. At the global level there is also a need for vision and a coherent approach on how to overcome energy poverty. A collaborative framework is needed so that global actors can get involved with national and regional collaborative processes in a synchronised way. This collaborative framework can be a political roadmap to intensify efforts to create a new energy paradigm as a crucial means of eradicating poverty worldwide.
About the Author: Alejandro Litovsky is senior advisor at AccountAbility
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