The Need For Modern Energy Access In Developing Countries 24

The general benefits modern energy access can offer have already been presented in a previous section of this chapter. There are, however, factors that drive the need for modern energy access in developing countries specifically, some of which relate to overcoming issues highlighted previously, such as reliability, and health concerns. Others include the need to meet the growing energy demands of an increasing population, to overcome the threat energy poverty poses to sustainable development and to drive economic and social development as a whole.

The Necessity Of Modern Energy Services Due To Population Increases

According to the United Nations (UN), the global population has more than trebled in the past 50 years and is set to increase by a further 3 billion over the next 65 years (UNPD 2010). This increase in population is increasing demand upon global resources. Concerns are being raised regarding future energy and food security as nations may be unable to meet the basic requirements of their citizens (Hanjra & Qureshi 2010, Khan & Hanjra 2009, Xia 2003).

The vast majority of this population increase is expected to be in developing countries (UNPD 2010, Xia 2003). In particular the population of India is expected to increase by almost 500 million people by 2065 (based on 2010 figures) (UNPD 2010). This not only represents a population increase of 38.0% in India, but will mean the nation as a whole will account for almost 18.0% of the world’s total population (UNPD 2010).

- 25 -

In developing counties, increases in population and development go hand in hand, that is development can lead to population growth through improved living standards, and population increase, can itself act as a stimulus to drive development and thus energy demand. As a result, the majority of future global energy demand is expected to be in developing countries (BP-PLC 2011, UN-AGECC 2010, UNDP 2005a, Xia 2003). They are also where the most investment is needed in order to meet future primary energy needs. According to the IEA, India alone needs to invest $1.7 trillion in order to meet its future primary energy needs (IEA 2009). Such high associated cost can often make the provision of universal energy a significant challenge in these countries.

How rapidly developing countries such as India will meet their future energy demands in a sustainable manner is a growing concern as the global community continues to look for ways of alleviating the impacts faced by climate change, which has resulted from the release of anthropogenic greenhouse gases (IPCC 2008).

Energy Poverty & Development

Energy poverty in many developing countries poses a real threat to future development. It is caused by a combination of factors including lack of income and high energy costs as well as a lack of physical access to certain types of energy (Pachauri & Spreng 2011). People are considered to be in energy poverty when they have inadequate and unreliable access to modern energy services and are still having to rely upon traditional biomass (IEA 2013, UN-AGECC 2010). These are the people whose energy access does not fulfil all of the criteria of ‘basic human needs’ as described by the UN-AGECC (see Figure 1.1).

However using this definition means that people can be classified as not being ‘energy poor’ but still have insufficient energy access to meet the minimum requirements (levels 1 and 2) described by the UN-AGECC.

People who are energy poor are also often income poor which leaves them financially unable to switch to more efficient, cleaner fuels (Balachandra 2011a). At the same time the impacts of having no option but to use traditional fuel (adverse health effect, and limiting of women’s activities) can reduce the opportunities for income generation trapping these household in poverty (Bruce et al. 2011).

Just as an individual can be energy poor so can a nation where it is restricted by the access it has to financial and energy resources which ultimately prevents it from

- 26 -

building adequate infrastructure that would enable connectivity to modern energy carriers (Balachandra 2011a). High fuel import costs also have an effect on the macroeconomics of a country as it often means funds are diverted away from other projects (Andrews 2005)

Violent conflict, civil wars and state failures have all stemmed from poverty and inequality. Extreme poverty in a country only further undermines national security and stability (UNDP 2010a). Countries experience higher rates of economic growth and poverty reduction when levels of inequality are low or falling, compared to those where inequality levels are rising or high (UNDP 2010a).

The Millennium Development Goals & Energy Access

Energy access has the power to have a profound impact upon various aspects of human development, from reducing poverty, improving gender equality, health, food security and climate change (UNDP 2010c). The best example of how energy access can positively affect the lives of people living in developing countries is through the impact it has on achieving the millennium development goals.

In September 2000 leaders from the member states of the United Nations (UN) signed the Millennium Declaration outlining eight goals, universally referred to as the Millennium Development Goals (MDG), aimed at encouraging development by improving social and economic conditions in the world’s poorest countries (IEA et al. 2010, UN 2010, UNDP 2005b, UNDP 2010a, UNDP 2010b). The MDG not only outlined a set of target for developing counties, but also acknowledges the contribution developed countries can make through debt relief, fair trade and technology transfer which will significantly support their successful completion (Haines & Cassels 2004). Specific goals include combating extreme poverty and hunger, reducing infant mortality and combating diseases such as HIV/AIDs and malaria. The target date for meeting these goals was set as 2015 (UN 2010, UNDP 2010a, UNDP 2010d), however despite significant progress having been made in some regions toward achieving these goals, recent reports published by the UN Development Programme (UNDP) suggest that many of the targets and goals are likely to be missed in most regions unless additional corrective action is taken immediately (UN 2010, UNDP 2010a, UNDP 2010d, UNDP 2014). The UN has attributed some of these shortfalls to be a result of the global financial and economic slowdown experienced in 2008, and the exacerbating effects of

- 27 -

food and energy security issues. In some cases these impacts may have even eroded some of the previous progress (UN 2010, UNDP 2010a, UNDP 2010b).

This explanation may lead to other underlying issues hampering the fulfilment of the MDG being overlooked. A UNDP report published in 2005, three years prior to the economic downturn, had already noted setbacks, stating that “many regions are off- track to meet the goals” (UNDP 2005b), suggesting that failures to meet targets and goals may have been due to other factors.

The same report notes that the provision of energy services as an important requirement in fulfilling all of the MDG (Kaygusuz 2012, UNDP 2005b). There is however no specific MDG relating to the provision of modern energy services, or any specific targets or indicators within the existing goals that allow for the monitoring of access (IEA et al. 2010, Ogola et al. 2011, UNDP 2005b).

The importance of delivering energy services as being a prerequisite for the fulfilment of the MDG was recognised at the 2002 World Summit for Sustainable Development (WSSD) in Johannesburg (Pachauri et al. 2004, UNDP 2005a, UNDP 2005b, UNDP 2010d, WEHAB 2002) and has since been repeatedly highlighted in several UNDP reports (UNDP 2005a, UNDP 2005b, UNDP 2010b, UNDP 2010c, UNDP 2010d) as well as by other observers including the United Kingdom’s Department for International Development (DFID) (DFID 2002a) and the International Energy Agency (IEA) (IEA et al. 2010).

A recent report from the UN identified inadequate energy systems as a threat to realising the MDG by 2015 (UN-AGECC 2010). The report also responded to calls for a new goal targeting universal energy access by outlining two new aims (UN-AGECC 2010).

1) Ensure universal access to modern energy services by 2030 2) Reduce global energy intensity by 40% by 2030.

These two targets aim to provide a platform by which movement towards sustainable universal energy access can be achieved. However, there has not been any international agreement or declaration from the UN members committing to achieving these goals as seen with the MDG in September 2000. Despite this, the report emphasises the significances of delivering these two goals as being key in accomplishing the MDG

- 28 -

(UN-AGECC 2010). The target date for their fulfilment of these targets, however, is fifteen years after the MDG deadline.

In a report by the UNDP, the importance of investing in activities across all the MDGs was highlighted as the relationships between different goals means that progress in one supports progress in others (UNDP 2010e). Attempting to tackle one goal at a time will ultimately end in failure to achieve all the goals. For the greatest impact therefore equal attention needs to be given to all the goals (UNDP 2010e).

Energy provision therefore has an even more vital position in the fulfilment of the MDGs as investing in this one area directly or indirectly contributes to the fulfilment of all the individual goals simultaneously.

Like the driving factors behind the requirement for energy, it is the services that energy provides, not the energy itself that is helping fulfil these goals.

A further threat to the achievement of MDG is climate change, the impacts of which are expected to be felt most severely in the countries that are already struggling to achieve there MDGs (UNDP 2010b). The impacts of climate change will put significant pressure on what are already fragile economies, and divert the limited resources available away from investment in the MDG project (UNDP 2010b).