Renewables for the Developing World

June 20, 2004 – Vol.9 No.13

RENEWABLES FOR THE DEVELOPING WORLD.

As oil supplies dwindle it seems likely that remaining supplies will be shifted from developing economies to wealthier, established, more powerful ones. As global warming takes hold the wealthier nations will be more able to deal with the consequences than the poorer ones.

The richer nations may be able to cope with the ever-growing problems of oil dependency, the poorer ones won’t.

The solution? Shift financial investment away from fossil fuels to renewables in the developing world, according to new report from the New Economy Foundation (nef) - The Price of Power.

The spiraling costs of climate change (an estimated $60 billion in 2003) combined with dwindling supplies of oil mean that without a major shift to renewables, efforts to relieve poverty will not be successful and people in all countries will suffer a progress-reversing energy shock.

The nef has great hope in renewables. They say that today only 13 percent of global energy supplies come from renewables (mostly hydropower) but there is the technological potential to increase renewable capacity by 120 times. Subsidies, however, (direct or indirect) to coal, oil and natural gas of at least $235 billion each year hold back their development. Further, the direct costs of damage from carbon emissions are not figured into the true costs of oil. The British Government, for instance, says that between GBP 50-200 ($90-365) in damage per ton of carbon emissions is done and is not factored into the fossil fuel equation.

Among the findings the nef report:

-- Only one to three percent of the $40 billion spent each year on energy investment in developing countries is on renewables.

-- One year’s worth of World Bank spending on fossil fuel projects, if spent on small scale solar projects in Sub-Saharan Africa instead, would provide 10 million people with electricity.

-- If all of the money spent by the World Bank between 1992 and 2003 on fossil projects was spent on solar projects in Sub-Saharan Africa instead, more than 30 million people there would have electricity

The nef says that at least for the developing world, small-scale renewables remain the best answer for communities and the environment. The group calls for some targets in a major shift to renewables:

-- Implement the G8’s target of serving at least one billion people by 2010 with renewable energy.

-- Phase out government subsidies for fossil fuels and nuclear energy.

-- Phase out World Bank Group subsidies for fossil fuel projects by 2008.

-- Reform international financial institutions and export credit agencies to dramatically increase funding for renewable energies.

-- Increase the target of access to clean energy to two billion of the world’s poorest people over the next ten years.

For the full report and a summary visit the nef at http://www.neweconomics.org/ (see Using Up Remaining Coal and Oil Will Increase Global Poverty)