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close this bookEnergy as it relates to Poverty Alleviation and Environmental Protection (UNDP, 1998, 36 p.)
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Open this folder and view contentsKey Energy Issues as They Relate to Poverty and Environment
View the documentDesigning Sustainable Energy1 Policies for Poverty Alleviation and Environmental Protection
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Open this folder and view contentsExamples of Sustainable Energy Strategies that Simultaneously Address Poverty and Environment Concerns
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Ellen Morris
Energy and Atmosphere Programme, UNDP
Sudhir Chella Rajan
Energy and Environment Consultant

Poverty and Environment Initiative Publications

There are many reasons to feel optimistic about the future. More people are better fed and housed than ever before, global literacy rates are increasing and more people have access to basic health care. Despite these significant gains, however, the need to arrest the increase in poverty while at the same time reversing the current trends of environmental degradation remains one of the world's greatest challenges. It is essential to tackle these two challenges simultaneously, since it is abundantly clear that the poor suffer disproportionately from the ill effects of environmental decline.

As part of the effort to meet these challenges, the United Nations Development Programme and the European Commission have embarked upon the Poverty and Environment Initiative. The goal of the Initiative is to provide a forum for experienced practitioners, policy-makers, researchers and politicians to share their knowledge and identify solutions. Drawing on successful development interventions from all over the world, this effort will result in recommendations for global advocacy, research priorities and practical policies that promote both poverty eradication and sound environmental management, thus creating "win-win" situations for poor people and the environments in which they live.

The Poverty and Environment Initiative allows UNDP and the EC to build upon, and create synergies among, commitments made at the United Nations Conference on Environment and Development (the Earth Summit) in Rio de Janeiro in 1992, the World Social Summit for Development in Copenhagen in 1995, and other global conferences of the 1990s.

This is one of a series of papers commissioned for the Poverty and Environment Initiative:

1 Links Between Poverty and the Environment in Urban Areas of Africa, Asia and Latin America

2 Community and Household Water Management: The Key to Environmental Regeneration and Poverty Alleviation

3 Poverty-Environment Interactions in Agriculture: Key Factors and Policy Implications

4 Energy as it Relates to Poverty Alleviation and Environmental Protection

5 Economic Reforms, Globalization, Poverty and the Environment

6 Forests and the Poverty-Environment Nexus

The views expressed in this publication are those of the authors and do not necessarily represent the views of the European Commission, the United Nations, or the United Nations Development Programme.


Poverty has received scant attention from an energy perspective. This is most remarkable given that energy is central to the satisfaction of basic nutrition and health needs, and that energy services constitute a sizeable share of total household expenditure among the poorest households in developing countries. Energy is not an end in itself, but rather a means to achieve the goal of sustainable human development. Although low energy consumption is not a cause of poverty, the lack of available energy services correlates closely with many poverty indicators. Nearly 2 billion people - about a third of humanity - continue to rely on biomass fuels and traditional technologies for cooking and heating, and about 1.5-2 billion people have no access to electricity.

Current approaches to energy are not sustainable and will, in fact, make energy a barrier to socio-economic development, especially for people living in poverty. What is needed now is a major reorientation toward sustainable energy technologies, including renewable energy, energy efficiency, and cleaner conventional fuels. The availability of new energy technologies offers the prospect of low-cost, localized solutions to national energy concerns.

This paper examines the importance of energy in addressing poverty eradication and environmental regeneration in light of key elements of the debate, current experiences and appropriate policy instruments. The authors explore energy's relationship to various facets of the poverty-environment nexus, including health issues, economic concerns, social welfare issues, and environmental degradation, and suggest a series of concrete policy measures designed to promote energy services that will lead to poverty eradication and environmental regeneration. Their persuasive argument for sustainable energy is enhanced by a series of examples illustrating strategies that have been successful in improving energy services for people living in poverty.

United Nations Development Programme and European Commission


For people living in poverty, the most pressing priority is the satisfaction of basic human needs, which includes access to food, shelter, water supply and sanitation and other services that will improve their standard of living, such as health care, education, and better transport. Problems of poverty in all its dimensions can be addressed with the improved provision of energy services. It is significant that most of those without access to modern energy services live in developing countries and belong to the segment of the human population that lives in poverty. While reliable and adequate energy supplies do not guarantee economic growth and employment generation, their absence typically limits growth. Although low energy consumption is not a cause of poverty, the lack of available energy services correlates closely with many poverty indicators. Moreover, the prospects for income generating activities that can help break the cycle of poverty often rely on the availability of energy. Nearly 2 billion people, constituting about a third of humanity, continue to rely on biomass fuels and traditional technologies for cooking and heating. About 1.5-to-2 billion people have no access to electricity.

The link between poverty and energy should not, however, be construed simply in terms of inability of the poor to afford better energy services. Energy services constitute a sizeable share of total household expenditure in developing countries. People living in poverty often pay a higher price per unit of energy services than do the rich. They also spend more time obtaining these energy services and rely on resource-scarce and polluting ways of converting energy for services like cooking, drinking water, heating and lighting, all of which have associated health impacts. Often, it is the absence of institutional arrangements to widen the access to modern energy services that characterises the condition of people living in poverty.

The production and use of energy have environmental consequences at local, regional and global levels. These impacts extend throughout the fuel cycle of an Energy Chain (see figure 1), that is, the entire chain of activities from resource through to end-use. They could also manifest themselves over short, medium or long time-scales, or have cascading effects by combining with other environmental problems. Energy services are the desired and useful products, processes, or services that result from the use of energy, for instance, illumination, comfortable indoor climate, refrigerated storage, transportation, appropriate temperatures for cooking, materials, etc. The energy chain to deliver these services begins with the collection or extraction of primary energy, which is then converted into energy carriers suitable for the end-use(s). These energy carriers are used in energy end-use technologies to provide the desired energy services (see figure 1). Thus far, most discussions of the energy sector have focussed on supply-side issues. However, the energy system involves much more than what is conventionally considered the energy sector and unless the scope of discussions about energy is extended, energy efficiency will receive less attention than it deserves.

The Human Development Index (HDI) developed by UNDP is a composite measure of development based on indicators of longevity, knowledge and standard of living. The relationship between HDI and per capita commercial energy consumption demonstrates that there is a steep increase in HDI as per capita energy consumption increases in countries whose per capita energy consumption is very low, as it is in the vast majority of developing countries. Therefore, modest increases in per capita energy consumption for the poorest countries can lead to tremendous improvements the quality of life of people living in these countries.

Policies and programmes that create opportunities for people living in poverty to improve their energy services, by making more efficient use of commercial and non-commercial energy and by shifting to higher quality energy carriers, will allow them to improve their standard of living. The substitution of modern energy carriers and more efficient energy conversion devices would confer sizeable gains in purchasing power on poor households. Improvements in energy efficiency have considerable potential to reduce poverty in all of its major dimensions and to facilitate development.

Figure 1 Energy Chain

Source: IPCC (1996).

Energy interventions can help in the challenges of poverty alleviation and environmental protection. The conventional belief has been that poverty and environment are linked in a "downward spiral" in which people living in poverty, forced to overuse environmental resources for their daily survival, are further impoverished by the degradation of these resources. Increasingly, however, it has become evident that people living in poverty are capable of creating arrangements that protect the environment while sustaining their livelihoods, to the extent that they are provided access to superior technology and finance. Thus, improved energy services will increase their satisfaction of basic needs, and in the process, reduce their adverse impacts on the environment. Nevertheless, realising this dual potential requires institutional as much as technological innovation. Primarily, the level of energy services, rather than energy consumption, needs to be taken as the indicator of development.

Energy is directly related to the most pressing social, environmental, economic and security issues which affect sustainable development. These include: poverty, jobs and income levels, access to social services, the situation of women, population growth, agricultural production and food scarcity, health, land degradation, climate change and environmental quality, and economic and security issues. These linkages and the past development patterns of the world have produced an unsustainable situation, as discussed in the recent UNDP publication, Energy after Rio: Prospects and Challenges (UNDP, 1997). Energy challenges should be tackled in ways such that these social, environmental, economic and security problems are ameliorated-not aggravated - as is typically the case with conventional energy strategies, which either ignore these global problems or do not deal with them adequately. Energy strategies, policies, programmes and projects should be consistent with, and contribute to, the solutions of the major global problems. The global goal for energy should be to make energy an instrument to help realize the broader goal of sustainable development. This paper examines the poverty-energy-environment nexus in light of the key elements of the debate, current experiences and policies to increase the use of sustainable energy technologies and to reduce the impact of poverty on resource degradation.


Since energy plays a substantial role in the everyday lives of people, and poverty describes the condition of people who are denied the opportunities for a tolerable existence, it is not surprising that there are multiple links between energy, poverty and the environment. The production and use of energy have environmental consequences to which the poor are especially vulnerable. People living in poverty have benefited very little from conventional energy policies and their implementation. More than 2 billion people continue to cook using traditional fuels, while 1.5-2 billion people lack electricity. At the same time, it has become widely recognised that development depends on access to appropriate energy services.

People living in poverty are often disproportionately the victims of the environmental effects related to energy, even while they are usually perceived as being the cause of worsening environmental problems. They are placed in that role because they a) use inefficient and relatively more polluting energy carriers and systems than those who are better off; and b) are often forced to engage in hazardous or ecologically disruptive activities to obtain energy services. Most importantly, however, they lack the political power to help foster institutional change that could address their own poverty or effectively combat the environmental harm caused by the mainstream energy economy, for instance, power producers. Broadly, six features of the relationship of energy with poverty and environment can be distinguished.

Inefficient and environmentally harmful energy use

The fuels and devices available to people living in poverty are typically less efficient, more hazardous to users and more damaging to the environment than those enjoyed by the better-off. The use of traditional fuels has a negative impact on the health of household members, especially women and children, when burned indoors without either a proper stove to help control the generation of smoke or a chimney to vent the smoke outside (Smith, 1987). Similarly, kerosene used in household lamps is a poison and a major fire hazard. Lighting with kerosene can be twice as expensive and up to 19 times less efficient per lumen of output than fluorescent lights using electricity as the energy carrier (Reddy, 1994). Moreover, inefficient lighting services in the home and in public areas are directly related to poor safety and personal security.

In many countries there is evidence of a so-called 'energy ladder' that differentiates income levels in terms of associated patterns of energy usage (Hosier and Dowd, 1987). For example, wood, dung, and other biomass represent the lowest rung on the energy ladder for cooking, with charcoal, coal, and when available, kerosene, representing the next rungs up the ladder to the highest rungs, electricity and gas. The order of fuels on the energy ladder corresponds to their efficiency (i.e., the fraction of energy released from the carrier that is actually turned into an energy service by the end-use device) and their "cleanliness". For example, the cook stove efficiencies of firewood, kerosene and gas are roughly 15%, 50%, and 65%, respectively. Therefore, moving up the energy ladder results in declining emissions of carbon monoxide, sulphur dioxide, and particulates.

It is estimated that more than half of the world's households use wood, crop residues and untreated coal for their cooking needs. In most developing countries, the household sector is the largest single energy consumer and cooking constitutes the dominant energy need. In the poorest countries, such as Burkina Faso, Ethiopia and Nepal, the household sector accounts for more than 90% of total energy consumption. The reliance on biomass fuels results in reduced agricultural productivity by depriving the soil of recycled nutrients that would have been available from tree, crop and animal residues and could be a cause of deforestation and desertification in some areas (Cecelski, 1987; Sarin, 1991).

Traditional cookstoves cause indoor concentrations of important pollutants, such as small particles less than 10 microns in diameter, known as PM10, carbon monoxide, benzene and formaldehyde, to be excessive compared to health-based standards or even to other common thermal applications. Such exposures are linked to acute respiratory infections, chronic obstructive lung diseases, low birth weights, lung cancer and eye problems, primarily, among women and children (Smith, 1990).

Solid fuels such as biomass are quite difficult to burn completely in simple household-sized stoves. Therefore, although biomass does not contain many non-combustible contaminants, the emissions of health-damaging pollutants in the form of incomplete combustion products are quite high per unit of energy. The use of solid fossil fuels for space and water heating in the home, or for cooking, is also widespread in many countries. Bituminous coal, or lignite for domestic use, is particularly problematic since it burns inefficiently and has high emissions of health-damaging air pollutants. Indeed, small-scale coal burning produces all the same pollutants as biomass, and in addition, sulfur and other toxic elements such as arsenic, fluoride, and lead. The use of unprocessed solid fuels, coal and biomass, in large furnaces and boilers achieves more complete combustion and thus lower pollution levels than in the case of household appliances.

Households that use coal and biomass generally have poor ventilation and because occupants are usually indoors when they use these fuels, they tend to be exposed to significant amounts of particulate pollution, as indicated in figure 2. Because a large portion of the population is exposed, the total indoor air pollution exposure is likely to be greater for the most important pollutants than from outdoor urban pollution in all the world's cities combined.

Health effects from biomass can be seen throughout the world. The largest direct impacts would seem to be respiratory infections in children (the most significant class of disease in the world) and chronic lung disease in nonsmoking women (Smith, 1987). Several other types of health problems are associated with this fuel cycle, including the impacts on women and children of gathering heavy loads of biomass in distant and sometimes dangerous areas. For example, an estimated 10,000 women fuelwood carriers in Addis Ababa, who supply one third of the wood fuel consumed in the city, suffer frequent falls, bone fractures, eye problems, headaches, rheumatism, anemia, chest, back and internal disorders, and miscarriages, from carrying loads that often approximate their own body weight and range from 40-10-50 kg. (Haile, 1991). The production of palm and other oils in women's informal sector enterprises is extremely arduous, requiring lifting and moving heavy containers of hot liquids and hence exposure to burns and smoke.

Figure 2 Approximate distribution of human exposure to particulate pollution.

Source: Smith (1993).

In addition, indirect health impacts from lack of fuel for proper cooking (malnutrition) and boiling water (diarrhea and parasites) may be significant, although difficult to document. The household use of solid fuels, therefore, is a useful indicator of potential environmental health hazards, although the degree of impact will depend on ventilation and other factors.

Today, widespread household use of coal is limited to a few countries; however, some countries are proposing to promote coal use as a substitute for dwindling supplies of biomass and to avoid increased demand for petroleum-based fuels, kerosene and gas. Given the high emissions associated with small-scale combustion of coal and the documented health effects due to household use of coal in China, South Africa, and elsewhere, this alternative should be carefully examined because of its adverse effects on health. In many countries of Europe in recent decades, the move away from household coal use was a primary means of controlling air pollution.

Household survey data reveal the connection between energy consumption patterns and poverty status. Figure 3 compares energy consumption and fuel sources of extremely low-income households (those in the lowest income quintile) with much wealthier households (those in the highest income quintile) in Pakistan. The energy carriers evaluated are biomass, kerosene, electricity, and gas; and the household activities examined are cooking and lighting. Note that many households could use multiple fuels for the same end-use (e.g., biomass and gas for cooking). The results in figure 3 suggest that people living in poverty are far more likely to use biomass rather than gas or electricity for cooking, and they are more inclined to use kerosene rather than electricity for lighting.

Figure 3 Household energy consumption and poverty status in Pakistan.

Source: Pakistan LSMS, 1991.

First-cost effect generates poverty-energy-environment lock-in

Since they cannot afford the initial costs of more efficient and cleaner devices and systems for cooking, lighting, etc., people living in poverty are often locked into a vicious cycle. They rely on patterns of energy use that contribute to depleting their resource base or they expose themselves to environmental harm and thereby deepening their misery. They deplete nearby fuelwood resources for cooking, and harm their habitat while further increasing their poverty.

Households make choices among the energy carrier options presumably on the basis of both the household's socio-economic characteristics and the attributes of the alternative energy carriers. Income is the main driver in choosing an energy carrier (Leach, 1992; Reddy and Reddy, 1994). From the standpoint of the consumer, the choice of energy carrier depends on whether or not it is affordable, accessible, convenient, easily controllable, clean, and efficient. Fuel costs have fixed and variable components. The division of costs into fixed, quasi-fixed, and variable components is relevant to household decisions about fuel choice. The outcome of these decisions depends upon the household's preparedness to forego present consumption for future benefits (i.e., upon the rate at which a household discounts future benefits). This discount rate is determined, in part, by the household's level of wealth and the liquidity of its assets. For example, households that apply high discount rates to fuel consumption decisions, either because of the high cost of diverting resources from other uses or of borrowing funds to cover up-front capital costs, will tend to prefer fuel carriers that involve lower up-front costs.

Compared to those who are better off, people living in poverty tend to attribute far more value to present benefits than to future ones. That is to say, they use much higher discount rates than do the rich when making decisions about energy carriers and think primarily in terms of the first cost, rather than the life-cycle cost (Reddy and Reddy, 1994). This attitude is quite judicious given their circumstances. They are among the least likely to receive conventional sources of credit from financial institutions and have highly uncertain income streams (Dasgupta, 1993).

For the poorest of the poor, small improvements in commercial energy services produce large welfare benefits

There is sufficient evidence that small improvements in the level of energy services available to people living in poverty could generate dramatic changes in their quality of life. Cross-country comparisons indicate a positive correlation between access to energy and electricity services and educational attainment and literacy among both the rural and urban poor. This may be because families lacking adequate energy supplies will tend to limit children's time spent on schoolwork and reading; in extreme cases, families may withdraw children, especially girls, from school to spend time on fuelwood and dung collection.

The Human Development Index (HDI) developed by UNDP is a composite measure of development based on indicators of longevity, knowledge and standard of living. The components used for calculating HDI are life expectancy, educational level (adult literacy and years of schooling), and per capita gross domestic product (adjusted for purchasing power parity). Figure 4 is based on data from 100 developed and developing countries and shows the relationship between HDI and per capita commercial energy consumption (Suarez, 1995). Note that there is a steep increase in HDI as per capita energy consumption increases in countries whose per capita energy consumption is less than about 1 ton of oil equivalent (i.e., the vast majority of developing countries). If one views this relationship in causal terms, then it could be argued that modest increases in per capita energy consumption for the poorest countries can lead to tremendous improvements the quality of life of people living in these countries. By contrast, further increases in energy consumption in countries that already have moderate to high levels of HDI will probably cause few, if any, increases in HDI.

Conventional energy paradigm contributes to perpetuation of poverty

Conventional ideas about energy and development are often themselves responsible for fostering the energy-poverty nexus because they assume that simply increasing the supply of energy will lead to an improvement in the macro-economy, whose benefits will eventually reach the poor. Instead of attempting to improve the level of energy services available to people in poverty to enhance their quality of life, policymakers are locked into modes of governance that focus on increasing the supply of fuels or electricity. Such measures can actually cause further harm to the people living in poverty because of local pollution or large-scale displacement or by creating an institutional environment that excludes the poor from acquiring quality energy services. For instance, many developing country governments set import duties and taxes very high for energy technology and equipment, including those that are very energy efficient, but offer subsidies to conventional energy, often to appease particular industry or agricultural lobbies. Thus, many efficient energy technologies that could improve energy services and environmental quality (e.g., solar photovoltaic or solar water heating systems) without the need for large investments to improve the supply of energy (through grid extension, for instance) are placed out of reach to poorer households.

Figure 4 Relationship between per capita energy consumption and Human Development Index.

Note: Date for 100 developed and developing countries
Source: Suarez (1995). Note, each dot corresponds to a country

Apart from such direct negative impacts of many governments' energy policies, the adverse effects of existing patterns of energy use on nutrition, health and productivity are likely to ensure that even the benefits of economic growth would be absorbed only very slowly by people living in poverty. For instance, schooling will continue to promote earning capacity, but by less when biomass is the dominant energy carrier because of poor lighting, limited access to knowledge via radio and television and poor school attendance due to respiratory illness. In contrast, policies and programs that focus resolutely on creating opportunities for the people living in poverty to improve their energy services can enable poorer households to enjoy both short-term and self-reinforcing long-term improvements in their standard of living.

Large conventional power projects, especially coal and hydropower, are associated with numerous environmental problems, and often people living in poverty are the most affected. Coal projects typically displace thousands of people from open cast mining areas, ash disposal sites and mine drainage areas. Fly ash, oxides of sulphur and nitrogen, contamination of ground and surface water and depletion of water resources cause serious harm to the health and livelihood of local communities.

Hydroelectric power currently accounts for nearly 20% of the world's electricity output. The world-wide technically usable potential is estimated to be seven times greater than today's generation (Moreira and Poole, 1993). However, development of potential capacity entails a number of hazards. The process of generating hydropower does not produce wastes or other harmful by-products. At the same time, the accumulation of a large, almost stationary body of water sets in motion a train of events, particularly in tropical areas, that may enhance the spread of infection and disease, including filariasis and schistosomiasis. Shallow waters associated with the shores of reservoirs can provide suitable breeding places for mosquito vectors of malaria.

Dams also create new and favorable habitats for various kinds of vegetation, which in turn may render sizeable areas more attractive to disease vectors. In addition, dissolved minerals, silt, and organic matter brought by in-flowing rivers, may alter the aquatic ecosystems and possibly cause algae blooms, and foster growth of snails, midges, and mosquito larvae. Dams also pose accident risks when sited upstream from large populations. Important indirect health effects can be created in populations forced to leave their lands because of large hydropower development (IPCC, 1996). Hydropower projects displace many people from reservoir sites, reduce downstream agricultural productivity and submerge valuable agricultural and forest land in upstream areas, while causing sedimentation and water quality concerns and increasing the risk of malaria, encephalitis and other water-borne diseases. People living in poverty are often the worst affected by all these environmental problems, the most serious to their livelihoods often being their involuntary resettlement. For instance, the Three Gorges Project in China is expected to displace about 1.25 million people and several hydro projects in India, including the Tehri, Sardar Sarovar and Upper Krishna projects have each displaced more than about 100,000 people (World Bank, 1994).

In short, policies and programmes that directly address opportunities for people living in poverty to improve the level and quality of their energy services will allow the poor to enjoy both short-term and self-reinforcing long-term improvements in their standard of living and preservation of the environment. The improvements can be accomplished by making more efficient use of commercial and non-commercial energy and by shifting to higher quality energy carriers.

Poverty and Energy in Pura Village

Pura village in Kunigal taluk in the state of Karnataka, India, was one of the earliest villages to be studied exhaustively for its energy consumption patterns (Ravindranath et al., 1979; ASTRA, 1982; UNDP, 1995). In 1977, it had a population of 357 in 56 households who consumed about 3000kWh of electricity per day for the following activities:

1. agricultural operations (with ragi and rice as the main crops),

2. domestic activities (grazing livestock, cooking, gathering fuelwood, and fetching water for domestic use, particularly drinking),

3. lighting, and

4. industry (pottery, flour mill, and coffee shop).

The sources of energy for these activities were fuelwood, human beings, kerosene, bullocks, and electricity, in the order of energy derived. Energy derived from fuelwood dominated the source set (89%) and domestic activities outranked all the others (91%) in terms of energy used.

Several features of the patterns of energy consumption in Pura are significant (Batliwala, 1995):

5. What is conventionally referred to as commercial energy (i.e., kerosene and electricity in the case of Pura) accounted for a mere 3 per cent of the inanimate energy used in the village, with the remaining 97 per cent coming from fuelwood. Further, fuelwood must be viewed as a noncommercial source, since only about 4 per cent of the total fuelwood requirement of Pura was purchased as a commodity, with the rest gathered at zero private cost.

6. Animate sources (human beings and bullocks) only accounted for about 8 per cent of the total energy, but the real significance of this contribution is revealed by the fact that these animate sources represented 77 per cent of the energy used in Pura's agriculture. In fact, this percentage would have been much higher were it not for the operation of four electrical pumpsets in Pura, which accounted for 23 per cent of the total agricultural energy.

7. Virtually all of Pura's energy consumption came from traditional renewable sources - thus, agriculture was largely based on human beings and bullocks, and domestic cooking utilized 19 per cent of the human energy and 80 per cent of the total inanimate energy (entirely fuelwood).

8. This pattern of dependence on renewable resources, although environmentally sound, was achieved at an exorbitant price. Levels of agricultural productivity were low, and large amounts of human energy were spent on fuelwood gathering (on the average, about two to six hours spent travelling four to eight kilometres per day per family to collect about 10 kilograms fuelwood).

9. Fetching water for domestic consumption also utilized a great deal of human energy (an average of one to five hours travelling up to six kilometers per day per household) to achieve an extremely low per capita water consumption of 17 liters per day.

10. Of the human energy for domestic activities, 46 per cent was spent on grazing livestock (5 to 8 hours/day/household), a crucial source of supplementary household income.

11. Women provided the major part of human labour (53 per cent), especially in gathering fuel (42 per cent), fetching water (80 per cent), grazing livestock (15 per cent), and agriculture (44 per cent). Their labour contributions were vital to the survival of families, a point now well established in the global literature, but still neglected by planners and policy-makers.

12. Similarly, children contributed a crucial share of the labour for gathering fuelwood (25 per cent), fetching water (14 per cent), and grazing livestock (33 per cent). The critical importance of children's labour contributions in poor households has significant implications for population and education policies and programmes - but again, largely ignored.

13. Only 25 per cent of the houses in the "electrified" village of Pura had domestic connections for electric lighting; the remaining 75 per cent depended on kerosene lamps, and of these lamps, three quarters were open-wick type.

14. A very small amount of electricity -day), flowed into Pura, and even this was distributed in a highly inegalitarian way - 65 per cent going to the four irrigation pumpsets of three landowners, 28 per cent to illuminate 14 out of 56 houses, and the remaining 7 per cent to a single flour-mill owner.

Since the Pura study, many studies of rural energy consumption patterns have been conducted in developing countries (e.g., Barnett et al., 1982; Nkonoki and Sorenson, 1984; Smith, 1986). The specific numbers vary, depending upon region, agro-climatic zone, proximity to forests, availability of crop residues, prevalent cropping pattern, etc., but the broad features of Pura's energy consumption pattern outlined here were generally validated.

Urban air pollution

Fossi fuel use for transport has increased dramatically over the past three decades. There has been a 3% annual growth rate in the world vehicle fleet leading, in 1996, to some 800 million vehicles on the world's roads. This growth rate is faster than that of either the world population or economy. For example, in 1965 there were fewer than 60 vehicles per 1,000 people in the world; today there are more than 140.

Transportation is a major cause of air pollution in urban areas. The major air pollution concerns are carbon monoxide (CO) emissions, photochemical smog, toxic emissions, and particulate emissions. Given the high growth rates of vehicle fleets in many developing countries, vehicle-generated environmental problems have the potential to increase steadily over the next decade. Vehicles can have a significant effect on human exposure to pollutants, because their emissions are released close to the ground. For example, vehicles are the dominant source of CO emissions and are likely to contribute to high CO concentrations at street level. At moderate concentrations, CO impairs motor skills and at higher concentrations it significantly impairs the bloodstream's oxygen-carrying capacity. Emissions of benzene, a carcinogenic compound that makes up 1-to- 2% of gasoline by weight, is a major concern. It is given off as a vapor by hot engines and fuel tanks and is present in auto exhausts, partly from the combustion of other aromatic compounds in gasoline.

Particulate pollution, which has been linked to pulmonary diseases and lung cancer, has become the leading public health concern relating to urban air pollution. The relatively high particulate emission levels from diesel engines, the relatively large diesel shares in the motor vehicle populations, and the rapidly growing demand for urban transportation in developing countries indicates that this situation is likely to get much worse unless fundamental changes can be made in the transport system. Exposure to PM10 (particles under 10 microns in diameter) is associated with cardiovascular disease, chronic bronchitis, and upper and lower respiratory tract infections.

Another particularly dangerous air pollutant is lead in gasoline, a highly toxic octane-boosting additive that affects mental development in children and causes kidney damage in both children and adults. Lead is still widely used in many parts of the world, although its use has been largely phased out in many countries both because of its toxicity and because its presence in gasoline makes it impossible to use catalytic converters for controlling tailpipe emissions. Developing countries tend to suffer more, not only because of less stringent environmental standards and weaker enforcement, but also because urbanisation trends are largest in these countries.

Additionally, vehicles contribute to the formation of secondary (photochemical) pollutants, such as ozone and other oxidising agents, which are becoming a widespread urban problem. At high concentrations, ozone impairs breathing capacity, causes eye irritation, and damages materials, vegetation, and crops. Photochemical smog is especially serious in Buenos Aires, Los Angeles, Mexico City, Sao Paulo, and Tokyo and is likely to become an ever more serious problem if current trends in urban transportation persist.

Considering six indicators of air quality: sulfur dioxide, solid particulate matter, lead, carbon monoxide, nitrous oxide, and ozone, the air pollution situation in twenty megacities - sixteen of which are in developing countries - is such that 38% of the indicators register as either "serious problems" or "moderate to heavy pollution" (see figure 5). In fact, most developing country megacities have air pollution levels well above WHO guidelines, and the situation is getting worse. World-wide, air pollution (due to transportation as well as other forms of producing or using energy) is estimated to cause more than 500,000 premature deaths and millions of respiratory illnesses each year. In some countries, where cities are often cloaked in smog, the cost of local air pollution has been estimated at between 0.5% and 2.5% of GDP and as much as 5% of GDP in China (World Bank, 1997).

The poor may be exposed to higher levels of pollution due to transportation, even if they are not the primary users of transportation services, simply because they live or work in close proximity to street traffic. For instance, women working in the informal sector on Bangkok streets have high exposures to traffic-based lead emissions from gasoline fuels and have given birth to newborns with dangerously high blood lead levels as a result [REF].

Climate Change

In 1995, the Intergovernmental Panel on Climate Change (IPCC), a panel of experts assembled by the United Nations, concluded after detailed scientific reviews that "the balance of evidence suggests a discernible human influence on global climate." (IPCC, 1996). This human influence on the climate is mainly due to the emissions of three greenhouse gases (GHG) - carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O), of which CO2 is the most significant. Energy production and use is responsible for 80% of all anthropogenic GHG emissions and even in fairly optimistic scenarios, carbon emissions from burning fossil fuels (in the form of CO2) are predicted to increase quite dramatically. Indeed, according to the most likely IPCC scenarios, they will double from a total of 6.5 Gigatons of carbon today to 13.8 Gigatons by 2050 (IPCC. 1992). Current patterns of land-use and energy have been deemed responsible for the net atmospheric increases in greenhouse gases, which are predicted to result in moderate to severe changes in regional and global temperature, precipitation, soil moisture and sea level.

Figure 5 Air Pollution in Megacities of the World

Source: UNEP/WHO, 1992

Changes in temperature and water availability will particularly affect the ecosystems of tropical forests and mountainous regions, reduce soil stability in some areas, increase the stress on fisheries and harm wetlands. In turn, there could be further reductions in natural water availability in areas already under stress. There are also likely to be adverse impacts on human health due to increased exposure to very hot weather and to severe weather events, increased risk of transmission of vector-borne and contagious diseases, and possible impairments in nutritional status. Some of the most catastrophic impacts are expected to be increased hurricane intensities in areas already prone to hurricane damage, which happen to fall across many parts of the developing world, including south and south-east Asia, the south Pacific and the Caribbean. In addition, rising sea-levels and increases in flooding, coastal erosion and storm frequency or intensity will put tens of millions of people at risk, especially in island states and low-lying countries such as the Maldives, Egypt and Bangladesh. People living in poverty are likely to be the worst affected by all these impacts, because they typically lack the resources required to make even marginal allowances (such as purchasing insurance) for increases in generalised risk to human health and habitat. Significantly, the impacts of the warming are likely to lead to higher economic costs for developing countries than for industrialised countries. Warming of 2-to-3 degrees Celsius by 2100 has been estimated to cost developing countries 5-to-9% of their GDP (IPCC, 1996).

Inordinate expenditure on energy

People living in poverty rely on energy sources that are outside the money economy whenever possible. At the same time they spend inordinate personal and family resources of time and effort to gather fuel and acquire their essential energy services. Most estimates of household expenditures on fuel are substantially understated for very low income households because people living in poverty devote a larger portion of their most important asset, their time, to the production of energy services. In general, people living in poverty expend more time and effort to obtain energy services that tend to be of lower quality than the energy services available to the rich. Poor women and children, in particular, bear the burden of having to carry water and firewood across long distances, while the better-off typically enjoy the convenience of having piped water and cooking gas delivered to their homes. Table 1 indicates that there is a striking difference between allocations of time and money by people living in poverty and by the wealthy. For example, very low-income households in Pakistan devote roughly 100 hours more per year to the collection of biomass than do the rich households. However, rich households spend about 30 times more money per year on fuel than do those living in poverty (table 1).

Poor women spend far more time and effort than men on energy-related activities. This gender bias is a further reflection of energy's largely non-monetised attributes among the poor, since much of women's work is characteristically unpaid work. Poor women are also disproportionately the victims of energy scarcity. The consequences are found in their poor nutritional status, poor health due to indoor air pollution, and even low literacy rates, which could be attributed to the fact that girls are more likely than boys to spend about 5 hours a day gathering fuelwood or drinking water (figure 6).

Table 1 Household Fuel Expenditure by Quintile in Pakistan

1st Quintile

5th Quintile







1 Money is 1991 Pakistani Rupees per year
2 Time is the average number of hours per year spent collecting wood or dung.
Source: (Pakistan, 1991)

Figure 6 Rural Transport Activities by Males and Females in Tanzania (a)

Figure 6 Rural Transport Activities by Males and Females in Tanzania (b)

Source: UNDP (1997).

The fact that the poor, and especially poor women, spend more time than others for energy services, has a powerful implication. The economic hardship endured by very low-income households is understated when their incomes or consumption expenditures are evaluated in terms of goods and services typically consumed by households with average incomes or consumption expenditures. In particular, most of women's work remains unpaid in non-marketed or subsistence activities and is thus unrecognised and undervalued. Overall, if unpaid activities were treated as market transactions at prevailing wages, it is estimated that global output would increase by US$16 trillion. This represents a 70% increase in the officially estimated global output of US$23 trillion. US$11 trillion of this increase would correspond to the non-monetised, "invisible" contribution of women (UNDP, 1996).

Moreover, people living in poverty are often more willing to pay for energy and energy-related services than is conventionally assumed, and typically do so for batteries, battery-charging, small quantities of kerosene, charcoal and, in some cases, fuelwood. A recent survey in Uganda discovered that there are more rural and peri-urban households with private access to electricity from car batteries than there are public sector grid-connected households in the whole country. They pay on average 20 times the urban tariff, and spend over US$10 a month on candles, lighting, kerosene, dry cell batteries and recharging car batteries-or US$320 million nationally every year (Tuntivate, 1997).

Designing Sustainable Energy1 Policies for Poverty Alleviation and Environmental Protection

1 Sustainable energy is defined as those energy interventions that support sustainable development.

The central priority for people living in poverty is the satisfaction of basic needs, which could be addressed by increasing the level of energy services. In fact, one of the ways in which energy strategies could be sustainable, that is, meet sustainable development goals, is by introducing specific technologies that would increase energy services for people living in poverty (e.g., efficient lighting technologies, water pumping technologies, efficient cookstoves, modern energy carriers for cooking). Such strategies could also promote job creation in rural areas and thereby help those currently living in poverty acquire the capability to free themselves from poverty. Moreover, the emphasis given to promoting the wide availability of modern energy carriers and inherently clean energy technologies would help improve their nutritional status and reduce their risks of ill-health and resource depletion, while also addressing global and regional environmental concerns.

Policies to promote the implementation of sustainable energy strategies must be sufficiently resourceful, and yet adaptable to local situations, to be able to address the numerous institutional and other challenges listed above. A few general guidelines for the development of policy measures are listed below:

· Promote the creation of favourable legal, institutional and regulatory climates for sustainable energy development and increased involvement of private sector. Privatisation policies must be designed explicitly to improve the access to energy services for people living in poverty, with incentives offered to private power developers to make use of the best suited technology options. In some cases, where grid access is convenient and cost-effective, flat rate, yet low cost, billing can overcome barriers related to costly metering. Similarly, many conventional problems of theft can be avoided by encouraging local, self-governing institutions to manage distribution of energy services, for instance, through bulk sales to co-operatives. The United States Public Utilities Regulatory Policy Act (PURPA) of 1978 provides one such example that significantly enhanced the participation of independent power producers (IPPs). PURPA obliged utilities in the United States to buy electricity generated by qualified IPPs at price equal to their avoided costs (the costs utilities avoided by not having generated electricity themselves). Supported under PURPA includes much of 9,000 MWe of biomass-fueled power plants in the US and wind and solar-thermal power stations in California. Experience has shown that the IPP industry is able to provide electricity at a lower cost than electricity utilities. A second innovative policy measure that has been used to promote renewable energy power generation is the renewables portfolio standard (RPS). Under the RPS, each retail supplier of electricity must provide a minimum percentage (specified by the State or the federal government) of renewable energy in its portfolio of electricity supplies. The RPS is intended to maximise the use of market forces in establishing renewable energy industries in the context of a restructured and competitive electric industry in which retail electricity consumers are free to choose their electricity suppliers and grid owners are required to serve as common carriers for all suppliers.

· Develop policies to phase out energy subsidies by offering to provide improved energy services to end-users such that their net expenditures remain nearly the same. Currently, most energy prices do not reflect externalities such as environmental and social costs due to energy production and supply. Initial measures to increase energy efficiency and introduce renewable energy sources may seem to be too costly in some contexts. Thus, unless all costs are internalised in energy pricing, consumers may find it difficult to justify purchasing cleaner fuels or energy technologies that would also promote sustainable development. Often, subsidies are associated with poor energy services, such as frequent voltage or frequency fluctuations for electricity, because energy suppliers find it difficult to generate revenue streams to allow routine maintenance of their equipment. If combined with appropriate financing schemes, end-users may be quite willing to use more efficient devices and also pay higher per unit prices in exchange for assured quality of energy services that will lower their total energy consumption. Many efficient energy technologies that could improve energy services and benefit the environment (e.g., renewable energy and energy efficiency technologies) without the need for large investments to improve the supply of energy are placed out of reach to poorer households.

· Promote initiatives to overcome high first costs and risks associated with sustainable energy technologies. This could be done by developing innovative financing mechanisms for extending credit to non-conventional borrowers. This is particularly important for people living in poverty because they think primarily in terms of the first cost, rather than the life-cycle cost, which would ultimately result in lower energy prices and improved energy services. Early penetration of such advanced technologies as household lighting systems using photovoltaic technology or efficient biomass or gas stoves will also help bring down costs, thus widening the market even further to encourage new entrants. In many cases, the high initial cost of renewable energy systems requires financial mechanisms to make them affordable to consumers. For example, the PT Sudimara Energi Surya, based in Indonesia, has been successful in selling more than 8,000 solar home systems from 1993-1995, through a network of local service centres that offered consumers energy-related services and credits. This arrangement made the average monthly repayments less than the monthly costs of conventional energy systems. By combining all of the operational and financial functions at a local level, it is possible to open up new markets and also serve the needs of the rural communities. In addition, this type of programme has helped to build capacity and expertise in the country by manufacturing and assembling system components in Indonesia. Because most renewable energy technologies are small and modular, their manufacture can benefit from the economies of producing large numbers of identical units. However, consumers cannot capture the full potential economic benefits of mass production if the market volume per supplier is small and if there are large transaction costs associated with accessing this limited market. The Argentine rural electric development concession is a mechanism that aggregates the market for these small-scale systems, thereby both facilitating the realisation of the economies of mass production and making possible substantial reductions in transaction costs per customer. As a result of a competitive process, it grants to a single supplier exclusive market development rights in a delineated region over a specified period of time in exchange for the supplier's agreement to meet the terms specified in the concession.

· Promote the development of productive uses (e.g., creating an additional income stream) for energy services. This could include developing strategies to fully utilise natural resources in order to create additional economic benefits and possibly the establishment of new industries (e.g. food processing industrial residues for ethanol). New urban industries can be create in value added energy generation activities. Such measures may persuade development aid agencies, governments and entrepreneurs to perceive the direct value in promoting sustainable energy policies. In addition, well-designed demonstration projects may also cause governments to revise obsolete laws and regulations that hinder the development of renewable energy or energy efficient technologies.

In Brazil, large scale generation of ethanol fuel from sugarcane was initiated as early as 1975 to reduce dependence on imported oil, to stabilize sugar production in the face of a volatile international sugar market, and to create employment in rural areas. Ethanol is made from sugarcane for use as a neat fuel (100% ethanol-fueled cars) and for blending with gasoline (up to 22% ethanol). The Brazilian ethanol industry is based on roughly 400 facilities drawing from areas of 5,000 to 50,000 hectares, with cane production carried out by some 60,000 suppliers.

· Support measures to develop indigenous capacity in the area of sustainable energy. This could include training and education to create local manufacturing capabilities, sales, and service industries related to sustainable energy, thus creating new jobs and economic activity. It will be essential to consider both value-added activities directly related to the delivery of energy services (e.g., battery charging stations, bottled gas distribution) and those that are indirectly related (e.g., food processing industry, trade and small scale manufacturing). Training will help build awareness of sustainable energy opportunities, widen skill levels and create a new manufacturing class that could eventually form new lobbies for sustainable energy. Training for government officials and development workers is also essential to help build organisational capability for creating and sustaining energy programmes that promote renewable energy and energy efficiency technologies.

Developing countries not only have the opportunity to employ the most technologically advanced energy systems available on the world market, but also they can consider deploying new, emerging technologies and systems which are not yet in wide use. The adoption of advanced technologies is often referred to as "technological leapfrogging", whereby developing countries leap over the industrialised countries. In general, because of the importance of technological innovation for development and, in particular, of the multiple benefits inherent in many advanced energy conversion and utilisation technologies, energy planning for developing countries should include technological leapfrogging, where appropriate.

· Promote various means to improve the utilisation of modern energy services that will help to improve the living conditions of people living in poverty and promote the delivery of more energy efficient municipal services for urban areas. This might include improved stoves, better ventilation, provision of hot water, improved sanitation, etc. Retrofitting existing structures for energy efficiency improvements would also improve energy services for people living in poverty. Similarly, consideration could be given to the energy services required to provide adequate street lighting, cleaner public transportation, communication infrastructure, water pumping and delivery etc. All such measures would help mainstream sustainable energy strategies by including them in other development initiatives considered by governments, donors and nongovernmental organisations.


While there are numerous opportunities available to improve the level of energy services for people living in poverty, there are still many challenges to implementing sustainable energy strategies (see, Reddy, 1991; Philips, 1991; World Bank, 1992; UNDP, 1997; EC/UNDP, 1999).

Subsidies for conventional fuels distort the markets

Many governments continue to provide subsidies to conventional forms of energy because of an inherent belief that increasing energy supply through large-scale centralised options is good for development. The resulting revenue loss and distortions in pricing structure usually generates operational inefficiency for the provider of energy services, which is often reflected in the poor quality of service to end users. Ironically, the subsidies themselves are typically targeted towards groups of consumers who may in fact be able and willing to pay higher charges if the quality of service were improved. Over time, however, countries can become locked into established patterns of energy supply with these inefficiencies and paradoxes. Meanwhile alternative energy strategies to improve the level of energy services through decentralised options and end-use efficiency measures are locked out of the system because they cannot compete on the basis of price or because they lack supporting infrastructure for their dissemination.

Pricing does not reflect externalities

Since energy prices do not reflect externalities such as environmental and social costs due to energy production and supply, initial measures to increase energy efficiency and introduce renewable energy sources may seem to be too costly in some contexts. Thus, unless all costs are internalised in energy pricing, consumers may find it difficult to justify purchasing cleaner fuels or energy technologies that would also promote sustainable development.

Theft and pilferage

The widespread provision of energy services is thwarted in many developing countries by the illegal tapping of electricity, pilfering of kerosene meant for the poor and corruption in government projects to disseminate efficient stoves, lighting systems, etc. As a result, the costs associated with these endeavours are generally much higher than they need be, were such theft not to take place. Thus, not only do the most needy persons and households often fail to enjoy the benefits of these large-scale endeavours, but the programmes themselves are found to be too expensive to endure beyond the initial stages that help secure political attention to those in power.

Outmoded policy

Many developing countries are slow to change their regulatory environment in the energy sector to accommodate innovative technologies and approaches. For instance, decentralised energy generation and supply are prohibited in some countries where government utilities provide grid services; alternatively, they may face complicated and time-consuming licensing procedures. Similarly, some local building codes may unintentionally disallow inhabitants from installing solar water heaters for shared use, or outdated forest laws may preclude the use of biomass for power generation by local communities.

Lack of coordination in decision-making

There are numerous ways in which decision-making about energy can fail to coalesce into a coherent long-term policy that promotes sustainable energy strategies. For instance, end users of energy may be too fragmented to have adequate market power to make decisions in favour of cleaner, more efficient technologies that improve the level of energy services. Alternatively, there may be a long time-lag between the resolve to implement such a strategy and its realisation as policy rules within a government organisation. During that period the original intent and design may have been altered or the principal promoters may no longer be involved in the implementation of policy. Technological innovation may have rendered the original project design or cost estimates obsolete, but organisational inertia may preclude policymakers from readjusting their focus accordingly. Such alterations could have crucial impacts on the long-term efficacy of the policy, especially when there is not sufficient leadership and commitment within organisations to promote sustainable energy strategies.

Lobbies supporting conventional energy

There are often strong special interest groups and entrenched lobbies supporting conventional energy supply, but relatively few, if any, that insist on policy changes to implement sustainable energy strategies. Some of these lobbies may be within government, either because of a misplaced belief in the superiority of the former approach or because of the greater possible rewards of corruption associated with large centralised energy projects as against small decentralised, community-operated ones.

Lack of information

The public and potential manufacturers or distributors generally lack information or are uncertain about alternative energy sources and appliances and end-uses that are more efficient. Many solutions are typically unavailable because equipment is not distributed by retailers due to the small size of the perceived market, through lack of awareness, or disbelief about the benefits in terms of life-cycle costs when the initial costs are relatively high. These barriers explain, for example, why the dissemination of compact fluorescent lamps has been relatively limited thus far.

Lack of skills

Installers and maintenance personnel of renewable energy and energy efficient equipment may lack skills, thus giving users the impression that the equipment is being launched prematurely in the market. Many projects have had to be abandoned because of lack of appropriate maintenance, unavailability of spare parts or ignorance about operational procedures. In addition, it is crucial that institutional mechanisms be set in place for organisational learning dissemination programmes. to take place, so that initial mistakes and successes can be studied to design better dissemination programmes.

Lack of initiative

Lack of government capability and lack of leadership and commitment by donors may inhibit development workers from applying sustainable energy strategies in standard poverty alleviation programmes, even if many of the obstacles listed above were absent. Thus, unless there are strong promoters within government or international agencies, the energy components in specific projects may be treated cursorily or eliminated entirely.


A few examples of measures that will directly improve the level of energy services to those living in poverty and thereby improve the environment are given below.

Improved cookstoves and modern fuels

Since cooking using traditional biomass fuels is both the dominant energy activity in developing countries and is the source of undue hardship to people living in poverty, the dissemination of more efficient cookstoves using traditional or modern fuels is an essential sustainable energy intervention. Depending on relative fuel and stove prices, substantial reductions in both operating costs and energy use can be obtained from switching from traditional stoves using commercially purchased fuelwood to improved biomass, gas, or kerosene stoves.

Several important lessons have been learned from the hundreds of cookstove demonstration and dissemination programmes that have taken place in developing countries, many of which were not initially successful. Cookstove design has since been geared to maximise combustion of fuel, maximise radiative heat transfer from the fire to the pot, maximise convection from the fire to the pot, and maximise conduction to the pot. Most importantly, it aims to maximise user satisfaction by making the stoves convenient to use (with local fuels, cooking pots and utensils) and able to easily prepare local dishes well (Kammen, 1995). Primarily, the end-users (mainly women) must find the stoves easy to use and fuel efficient under a variety of conditions. The stoves must also perform robustly in the environmental and practical constraints of indoor or outdoor kitchens.

In rural areas of developing countries, traditional fuels - wood, crop residues, and dung-remain the primary cooking fuels, while in many urban areas, charcoal is used also. About 2 billion people depend on these crude polluting biomass fuels for their cooking and other energy needs. Higher incomes and reliable access to fuel supplies enable people to switch to more modern stoves and cleaner fuels such as kerosene, gas, dimethyl ether, electricity, and, potentially, to modern biomass - a transition that is widely observed around the world largely irrespective of cultural traditions. These technologies are preferred for their convenience, comfort, cleanliness, ease of operation, speed, efficiency, and other attributes. The efficiency, cost, and performance of stoves generally increase as consumers shift progressively from wood stoves to charcoal, kerosene, LPG or gas, and electric.

Depending on relative fuel and stove prices, substantial reductions in both operating costs and energy use can be obtained from switching from traditional stoves using commercially purchased fuelwood to improved biomass, gas, or kerosene stoves. There may be opportunities to substitute high performance biomass stoves for traditional ones or to substitute liquid or gas (fossil- or biomass-based) stoves for biomass stoves. The key to success in dissemination is persistence and a sound approach, including careful market assessment, product design, production testing, market trials and help with commercialisation. One example of a successful programme has been in Ethiopia, where a British NGO, Energy for Sustainable Development, has developed and commercialised two types of improved biomass cookstoves through an iterative approach of needs assessment, design, product trials, redesign and performance monitoring. The team works with households, stove producers, installers and merchants and pays attention to promotion, technical assistance, quality control and to the provision of business, management and marketing skills to producers. Over 600,000 stoves of one type, and 54,000 of a second type introduced a few years later and using about half the fuel of conventional stoves, have been disseminated, with volumes expected to increase substantially in subsequent years (EC/UNDP, 1999).

Rural electrification - decentralised options

Decentralised sustainable energy can contribute significantly to improving the living conditions of rural populations by bringing energy services to outlying areas that cannot be quickly connected to electricity grids. Improved access to electricity in rural areas need not take place only through grid extension. In recent years, technological developments in small hydropower, biomass utilisation, wind energy and solar photovoltaic systems have created new opportunities for rural development, so that Decentralised Rural Electrification (DRE) is a proven competitor to grid extension. Renewable energy sources are the only ones capable of assuring access of rural populations to essential energy-based services (health, education, etc.) in the near term. Several renewable energy technologies provide cost effective energy alternatives to grid extension or isolated diesel mini grids in rural areas. This is not only by itself extremely important, but by reducing the exodus from rural regions also reduces some of the development problems of cities.

Access to energy services can help the people living in poverty to remedy two of the pervasive problems that keep them in poverty - their low productivity and their limited range of productive options. Many rural enterprises can become viable only once there is access to a reliable modern energy source -mechanical power, electricity, process heat, transport fuel. In fact, decentralised generation and distribution of electricity creates more employment in rural areas than central generation. An energy system can create a net profit by displacing current energy costs, freeing time that can be put to more productive use and by increasing the efficiency of income generating activities. Furthermore, biomass production for energy could be a major source of jobs and revenues for rural populations. Advanced small-scale biomass energy technologies could generate electricity cost-effectively and justify extending power lines to rural areas, with electricity flowing from the rural areas to the cities (thereby, generating rural income), confounding the conventional wisdom about the economics of extending power lines to rural areas.

The government of Argentina has put in place an innovative approach to rural electrification as part of its electricity restructuring exercise, by establishing an electricity concession market for 1.4 million currently unserved inhabitants. Private purchasers of the concessions will provide electricity to dispersed rural residences and public facilities (e.g., schools, medical centres, drinking water services, etc.) through a range of energy technologies determined by what the concessionaire considers to be is the least costly. Solar photovoltaic panels, small windmills, hydraulic microturbines, and diesel-driven generators will compete on the basis of the lowest cost of provided energy. Preliminary analyses show that renewable technologies will often be competitive with diesel generators. Specifically, it is likely that a large share of residences will receive power from household photovoltaic systems (UNDP, 1997).

Improved urban transportation

Since transport is one of the fastest growing sectors of energy use in the developing world and mobility is linked to the basic need of access to jobs, the planning of efficient land-use patterns and transport corridors in urban areas will have significant long-term implications for both energy and poverty. Furthermore, clean fuels and efficient public transportation systems can reduce pollution in urban areas, improving health dramatically. One major technological option to reduce transport demand in developing countries is to improve telecommunication systems, which has had the proven effect of cutting down on trips meant mainly to seek information (Davidson, 1987).

An innovative approach to improved public transportation has been attempted since the 1970s in Curitiba, in southern Brazil. Based on the notion that urban growth ought to take place along planned transport corridors, the city implemented a system of five exclusive busways along radial axes. These were connected with inter-district and feeder bus routes at closed terminals for high-speed transfers. The system implemented a single (social) fare, including transfers, to cross-subsidise the poor who tend to have relatively long commutes. Additional features were special raised boarding-tube bus stops, speed boarding, and extra-long articulated (bus bodies connected by a pivot) buses to increase capacity. A crucial element of the system was its integration with land-use zoning. The structural axes were zoned for high-density land-use, with lower density zoning away from access to public transport. In addition, the government purchased land for low-income housing early on in areas away from the city knowing that transport corridors would be developed there. Special bicycle paths and pedestrian areas were also developed to reduce automobile use. The whole system has been implemented in partnership with private bus companies that buy buses and operate the system, following guidance established by the city.

Curitiba has over 500,000 private cars (more per capita that any Brazilian city except Brasilia). Remarkably, 75% of all commuters (more than 1.3 million passengers per day) use the bus network. This has resulted in fuel consumption rates on the transportation sector that are 25% lower per capita than comparable Brazilian cities and has contributed to the city having one of the lowest rates of ambient air pollution in the country. Finally, the average Curitiba resident spends only about 10% of his or her income on transport, which is a relatively low percentage in Brazil (Rabinovitch and Leitmann, 1993).

Modernised biomass

To assist in providing improved energy services in rural areas, modernised biomass utilisation shows great promise. The widespread use of modernised biomass for cooking and combined heat and power (CHP) generation in rural areas can address multiple social, economic and environmental bottlenecks which now constrain local development. The availability of low-cost biomass power in rural areas could be helpful in providing cleaner, more energy efficient rural energy services to support local development, promote environmental protection, and stem the use of coal as a home fuel. It can also help improve the living conditions of rural people, especially women and children who currently face indoor air pollution associated with open burning of agricultural residues.

Gasification of biomass for energy uses through biomethanation or thermochemical means is an important option that has great potential in rural areas in developing countries. For instance, community biogas plants for power generation using cattle dung as feedstock have been used in villages in Karnataka, India (see Section 2.4 for detailed description of this project). The energy provides lighting and drinking water services at costs that are competitive with other decentralised options like household photovoltaic systems (Shivakumar et al., 1998). Similarly, Jilin province in China has embarked on a program to generate corn stalks producer gas using thermochemical gasification for use as a cooking fuel in village households and for fueling engines for electric power generation.

In Brazil, large scale generation of fuel ethanol from sugarcane began as early in 1975 to reduce the counter-dependence on imported oil, to stabilize sugar production in the face of a volatile international sugar market, and to create employment in rural areas. Ethanol is made from sugarcane for use as a neat fuel (100% ethanol-fueled cars) and for blending with gasoline (up to 22% ethanol). The Brazilian ethanol industry is based on roughly 400 facilities drawing from areas of 5,000 to 50,000 hectares, with cane production carried out by some 60,000 suppliers.


Conventional energy strategies for the most part have failed to help meet the basic human needs of the poor majority. Yet numerous opportunities are available for meeting basic needs at much lower energy consumption levels than has traditionally been the case. By using the most efficient technologies available today, and focusing increasingly on renewable sources of energy, the level of energy services can be increased considerably. Those increased services are essential for meeting basic human needs and in the process alleviating poverty and protecting the environment.

For people living in poverty, the first priority is the satisfaction of such basic human needs as access to jobs, food, health services, education, housing, running water, sanitation, etc. Energy plays an important role in providing for these needs. Although low energy consumption is not a cause of poverty, the lack of available energy services correlates closely with many poverty indicators. Addressing the problems of poverty requires addressing its many dimensions - poor education, bad health care, inadequate sanitation, etc. Addressing these issues involves increasing the level of energy services rather then the quantity of energy supply.

Developing countries have the most to gain from a sustainable energy future.

Those people living in poverty are the most vulnerable to the negative environmental effects of current energy development and would benefit the most in terms of social and economic development from a sustainable energy future. Improved energy services are needed but are not sufficient on their own to reach sustainable development goals. Energy activities can affect the goals of poverty and environment in profound ways, and a shift in the existing energy supply paradigm must occur towards measures that support sustainable development and sustainable energy.


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