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1.5-2 billion people are without access to electricity

Energy is directly related to the most pressing social issues which affect sustainable development: poverty, jobs and incomes levels, access to social services, gender disparity, population growth, agricultural production and food scarcity, health, land degradation, climate change and environmental quality, and economic and security issues. Without adequate attention to the critical importance of energy to all these issues, the global social goals agreed on at UN conferences in the 1990’s cannot be achieved. Indeed the magnitude of change needed is large, fundamental and directly related to the energy produced and consumed internationally.

2.1.1 Poverty

people living in poverty pay a higher price per unit of energy services than do the rich

Poverty is indisputably among the world’s largest, most urgent and most fundamental issues. Despite this, poverty has received scant attention from an energy perspective. This neglect of the poverty-energy nexus is most surprising since energy is of vital importance to the satisfaction of basic needs, particularly nutrition and health.

A large proportion of humanity does not enjoy the benefits that modern energy sources and devices bring. About 2 billion people still cook using traditional fuels, and 1.5-2 billion people are without access to electricity.

Energy services constitute a sizeable share of total household expenditure in developing countries. People living in poverty pay a higher price per unit of energy services than do the rich. They also spend more time obtaining these energy services. The substitution of modern energy carriers and more efficient energy conversion devices would confer sizeable gains in purchasing power on poor urban households. Improvements in energy efficiency have considerable potential to reduce poverty in all of its key dimensions, and to facilitate development.

improvements in energy efficiency have considerable potential to reduce poverty

Patterns of energy consumption among people living in poverty tend to further worsen their misery. Firstly, because these people spend a higher proportion of their income on energy, they are less likely to accumulate the investments necessary to make use of less costly or higher quality energy sources. Secondly, the use of traditional fuels has a negative impact on the health of household members, especially when burned indoors without either a proper stove to help control the generation of smoke, or a chimney to vent the smoke outside.

Policies and programmes that directly address the creation of opportunities for people living in poverty to improve the level and quality of their energy services (by making more efficient use of commercial and non-commercial energy and by shifting to higher quality energy carriers) will allow the poor to enjoy both short-term and self-reinforcing long-term improvements in their standard of living. By contrast, the standard poverty-alleviation strategies - macro-economic growth, human capital investment, and redistribution - do not focus on the energy-poverty nexus in developing countries. If energy is left out of poverty elimination strategies, such as those promised by the Copenhagen Social Summit, these strategies are doomed to fail.

2.1.2 Gender Disparity

Conventional energy approaches virtually exclude women’s concerns from the current capital-intensive, monetised, expert-dominated energy sector. Consequently, economic growth has unfortunately been accompanied by (often severe) gender disparities. Globally, 70% of people living in poverty are women.

More than half of the world’s households cook daily with wood, crop residues and untreated coal. Home-based industries depend on biomass supplies. Women in developing countries spend long hours working in survival activities - cooking, fuelwood collection, water carrying and food processing. Women’s time in these survival tasks is, however, largely invisible in the statistics compiled on patterns of energy use. Women and children’s time spent on fuel and water collection represents a high social and economic cost to the family and society, and is directly related to the low level of energy services that are available to people living in poverty.

The nutritional status of women is often worsened because, for cultural reasons, they eat last and least and in addition they tend to expend more energy in work than men. Part of this greater labour is related to domestic chores such as gathering firewood, fetching drinking water, etc. These chores could be avoided, for example, by providing access to cooking fuel and/or efficient stoves and to water for domestic purposes.

Women’s key role in environment issues and sustainable development is an accepted fact. What is less well-known is that many of women’s environmental roles and concerns are closely linked to the use, supply and management of energy resources. Strengthening the role of energy in advancing sustainable development will require paying attention to the special role of women, and specific attention to women’s participation in energy activities. This can be achieved by recognising the specific relationships between women’s needs, roles and concerns, and the energy system.

2.1.3 Population

The conventional view is that population determines energy use as an external influence, i.e., exogenously. There is another view that the pattern of energy use influences population growth, through its effect on the desired number of births in a family and the relative benefits of fertility. The implication of this dimension of the energy-population nexus is that one important challenge for the energy system is to accelerate the demographic transition in which the population moves from an old balance of high mortality and high fertility to a new balance of low mortality and low fertility. This acceleration requires a dramatic reduction in fertility to stabilise the global population as quickly as possible, and at as low a level as possible.

women and children’s time spent in fuel and water collection represents a high social and economic cost

The reduction of fertility depends upon crucial developmental tasks such as increased life expectancy, improvement of the living environment (drinking water, sanitation, housing, etc.), education of women, diversion of children from household-survival tasks and employment to schooling, etc. Almost every one of these socio-economic preconditions for smaller family size and fertility decline depends upon energy-utilising technologies. But current patterns of energy use in developing countries do not reflect emphasis on the provision of safe and sufficient supplies of drinking water, the maintenance of a clean and healthy environment, the reduction of the drudgery of household chores traditionally performed by women, the relief from household-survival tasks carried out by children and the establishment of income-generating industries in rural areas.

Thus, current patterns of energy use do not emphasise the type of energy-utilising technologies necessary to satisfy the socio-economic preconditions for fertility decline.

2.1.4 Undernutrition and Food

About 800 million people, approximately 15% of the population in developing countries, are undernourished. The elimination of chronic undernutrition will require at least: (i) elimination of poverty through jobs creation (and thereby better distribution of income), and (ii) increased food production. The Food and Agriculture Organisation (FAO) estimates that a 35% increase of recent food production in developing countries is required by the year 2010. This could be achieved by increasing crop yields, by a greater intensity of cropping and perhaps also by bringing new land into agricultural production.

the pattern of energy use influences population growth

Gastro-intestinal parasites can undermine nutritional status by consuming, perhaps as much as 10-15% of the food intake, often termed the “leaky bucket” syndrome. This problem has to be tackled by health care and the provision of safe water and a clean living environment.

Many measures are necessary such as the raising of incomes through employment generation, the provision of a healthy environment, and programmes of supplementary nutrition for vulnerable groups. Several of these measures are strongly energy-related and if energy is to contribute to the solution of the problem of undernutrition, the energy components of these measures must be built into development strategies.

2.2.1 Health

energy measures to contribute to the solution of under nutrition must be built into development strategies

The energy-health nexus arises because, without proper control, the production and use of energy can be accompanied by adverse impacts on the environment and, ultimately, on human health.

all megacities in developing countries have air pollution levels well above World Health Organisation (WHO) guidelines

The combustion of fossil fuels is the largest source of atmospheric pollution involving sulphur and nitrogen oxides, heavy metals, unburned hydrocarbons, particulates and carbon monoxide, among other directly health-damaging pollutants. Such pollution arises, not only as a result of fossil fuel combustion in power plants and industry, but also from motor vehicles and households.

In urban environments, the transport sector is a major cause of the high levels of air pollution - gaseous pollutants and ultra-fine particulates emitted by petrol-powered vehicles, fine particulates emitted from poorly-maintained diesel engines, secondary (photochemical) pollutants such as ozone and the additional insidious pollutant, lead from traditional petrol use. Of these, suspended particulates are the major cause of concern to human health. All megacities in developing countries, and most industrialised countries, have air pollution levels well above the World Health Organisation (WHO) guidelines. Furthermore, the situation is getting worse because of the high growth rates of vehicle fleets in the context of inadequate road infrastructure and growing urbanisation in many developing countries.

women and children have the highest exposures to indoor air pollution

Household use of biomass (and coal) results in greater human exposure to pollutants because emissions are high, ventilation is often poor, people are generally nearby at the time of use, and the affected populations are large. Significant health effects can thus be expected. The largest direct impacts would seem to be respiratory infections in children (an important class of disease) and chronic lung disease in women.

The energy-health nexus consists, therefore, of the fact that current energy utilisation patterns in rural households give rise to the problem of indoor air pollution affecting an increasing population and, in cities, to the growing problem of urban air pollution.

2.2.2 Acidification

a key concern in developing countries is the potential impact of acidification on agricultural crops

Acidification, the process by which soils and surface waters are depleted of bases and consequently suffer an increase in acidity, results in damage to terrestrial and aquatic ecosystems. Thousands of lakes and small streams have become acidified during this century in Europe and North America, and the flora and fauna in these lakes have changed drastically. Many surface waters are entirely devoid of fish, amphibians and other creatures. There has also been significant damage to forests in Europe and North America.

Emissions of sulphur dioxide, nitrogen oxides and ammonia give rise to acidifying depositions after chemical transformation and transport in the atmosphere. Sulphur and nitrogen oxides are mainly formed during the combustion of fossil fuels in the power and transport sectors. This is the energy-acidification nexus.

Recognition of this linkage has led to a Sulphur Protocol under the Convention on Long-Range Transboundary Air Pollution in Europe requiring significant reductions of sulphur emissions. However, even if the requirements of the protocol were fulfilled, large areas will have acid depositions well above critical levels.

The prognosis indicates that there is potential for serious damage in many parts of the world that have not experienced this type of pollution problem before. Technologies exist to abate these emissions, but they are costly and need to be put in place on a widespread scale.

In many developing countries emissions are increasing to serious levels. A key concern in these countries is the potential impact on agricultural crops. Whereas in industrialised countries farmers can lime the soils if they become acidified, it is unlikely that poor farmers in the developing world can afford to do so. Acidic deposition is likely to become an important regional issue, particularly in Asia, but also in parts of South and Central America and in Southern Africa.

2.2.3 Climate Change

According to the 1995 Scientific Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), “The body of statistical evidence now points towards a discernible human influence on global climate.” This influence is due to the increase in atmospheric concentrations of greenhouse gases since pre-industrial times, and the effect of this increase on the energy balance of the Earth.

It is now the view of the IPCC that continued increases in greenhouse gas concentrations, as a result of human activity, will lead to significant climate change (enhanced global warming) in the coming century. However, uncertainties still exist limiting our ability to quantify human influence and project the future. Nevertheless, it appears that major changes are required in current fossil-fuel-based energy consumption patterns. This is because business-as-usual is likely to increase carbon emissions by a factor of three by 2100, whereas according to the IPCC, emissions will have to fall far below the present level in order to stabilise the atmospheric concentration of carbon dioxide (CO₂).

Earlier IPCC findings spurred governments to sign the United Nations Framework Convention on Climate Change (FCCC) in Rio (1992). Since 1994, the UNFCCC has now been ratified by more than four-fifths of the UN member states (164 as of end of 1996). The UNFCCC involves voluntary, rather than binding, emission stabilisation commitments. Targets and timetables for emission reductions are now being negotiated. Inventories of human-related emissions of CO, (1990-1995 and 2000 projections) have shown that most industrialised countries will not, in fact, meet their voluntary target of limiting their year 2000 emissions to 1990 levels.

The threat of climate change is principally an energy-related problem. Current energy systems are based on the combustion of fossil fuels which account for 76% of the world’s primary energy. This combustion leads to about three-fourths of the annual human-related emissions of the main greenhouse gas CO₂. These annual emissions accumulate, increasing the greenhouse gas concentrations in the atmosphere. Even taking into account the quantitative uncertainties, current energy patterns are leading the world down a path that is unsustainable by threatening the global climate. This is the energy-climate change nexus.

2.2.4 Land Degradation

emissions will have to fall below the present level in order to stabilise the atmospheric concentration of CO₂

Globally about 2000 million hectares of land have been degraded - an area equal to more than one third of all cropland and forested land. Some 300 million hectares are under such severe stress conditions that damage can be considered irreversible. If left unchecked, most of the remaining degraded land is likely to reach similar conditions. Land continues to be degraded at rates that are high by historical standards. The major causes of land degradation are deforestation, shifting cultivation practices in agriculture, over-grazing and the use of bush fires for short-term gains. Land degradation now affects the lives of hundreds of millions of people and is hampering the development of countries. Stopping land degradation is a high priority in many areas of the world.

Although the production of energy (including biomass energy or bioenergy) is not a major global cause of land degradation (although the impact may be large locally and regionally), energy can play a major role in stemming and reversing the problem. Specifically, the introduction of modern biomass energy systems (e.g., for electricity generation) would put a sufficiently high market price on biomass to make it profitable to restore many of the potentially productive degraded lands to “energy farm quality” so as to be able to serve lucrative biomass energy markets. Thus, the energy-land degradation nexus appears “more a cure than a disease.”

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energy sector emissions contribute the majority of global greenhouse gases

Expenditure on increasing energy supply represents a major economic cost to all countries. In the developing world, the financial and opportunity cost of capital, foreign exchange constraints, and the cost of energy subsidies combine to create severe economic constraints to supply-driven models for expanding energy.

2.3.1 Investment Requirements of Energy

The present level of world-wide investment in the energy supply sector, $450 billion per year, is projected to increase to perhaps $750 billion per year by 2020, about half of which would be for the power sector. Such investment levels cannot be sustained by traditional sources of energy financing.

In recent years the financing of large-scale electric power projects in developing countries has become problematic. With the international debt crisis that began in 1982, investments began to fall. External financing also dropped. Although the level of domestic savings in many developing countries is substantial, there have been widespread political, institutional and cultural barriers to the successful harnessing of domestic savings for energy and many other investment purposes.

energy can play a major role in stemming and reversing the problem of land degradation

Underpricing of electricity has meant utilities have little or no retained earnings. Their shaky financial condition has given them poor credit ratings in international commercial capital markets. Governments that have historically provided much of the necessary capital face mounting fiscal constraints that make it ever more difficult to supply major capital for electric utilities. Also, the multilateral financing agencies are able to provide only a small fraction of the capital needed. All of this undermines self-reliance and leads to deals that reflect the high price of capital arising from the high financial risks involved.

the search for new sources of finance has led to a drive for privatisation in the energy sector to attract private capital

There have also been some significant changes in the sources of energy finance. Official development finance has declined as a proportion of total funding and is expected to diminish further. Consequently, external private financing and domestic financing will need to increase. A substantial increase of private investment in developing countries has occurred in the first half of 1990, not always for the creation of new capacity but for buying existing capacity. The search for new sources of finance has led to a drive for privatisation in the energy sector in order to attract private capital.

2.3.2 Foreign Exchange Impacts of Energy Imports

energy imports represent a significant fraction of foreign exchange earnings for many developing countries

The dependence on fossil fuels has created a wide variety of problems for non-oil producing developing countries, as well as for some industrialised countries and economies in transition. In over 30 countries energy imports exceed 10% of the value of all exports, a heavy burden on their balance of trade often leading to debt problems. In about 20 developing countries, payments for oil imports exceed payments for external debt servicing. This is an important aspect of the energy-foreign exchange nexus.

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dependence on oil imports represents one of the significant potential sources of conflict in the world today

Current approaches to energy pose major national, regional and global threats to security, and ultimately sustainable development.

2.4.1 Energy and National Security

There are many security issues related to energy. An issue of dominant concern is the growing dependence of most OECD and developing countries on oil imports from the Middle East. This dependence represents one of the significant potential sources of conflict in the world today.

Dependence on Middle Eastern oil is likely to persist, since 65% of the world’s proven oil reserves are in the Middle East, and oil production costs are especially low there.

Security concerns relating to energy also arise in the harnessing of rivers for hydro-power in watersheds, involving several countries. On the other hand, strong connections between supply sources and markets, such as in the case of natural gas pipelines, can lead to mutual dependence and be a stabilising factor. This is the energy-security nexus.

2.4.2 Nuclear Energy and Nuclear Weapons Proliferation

if nuclear power produces an even more significant proportion of world energy, the safeguarding of weapons-usable materials will become still more daunting

Today, nuclear power accounts for about 5% of the world’s energy, and about 15% of its electricity. Nuclear energy could replace baseload fossil fuel electricity generation in many parts of the world, if generally acceptable responses can be found to concerns such as reactor safety, radioactive-waste transport and disposal, and proliferation.

Nuclear power poses security challenges because of the link between nuclear power and nuclear weapons. Nuclear power programmes require national cadres of nuclear scientists and technicians, a network of research facilities, research reactors and laboratories - all indispensable to a nuclear weapons programme. But the most direct connection between civilian nuclear power programs to produce electricity and nuclear weapons proliferation - the (nuclear) energy-nuclear weapons nexus - is through the production and use of fissile materials, plutonium and highly-enriched uranium, which could be used in nuclear weapons.

For these reasons the Nuclear Non-Proliferation Treaty was developed (and there are now 175 parties to the Treaty as of 5 November 1996) to provide a system of safeguards aimed at assuring that civilian nuclear power programs not be used to divert nuclear materials to weapon usage. Unfortunately, safeguards are an imperfect barrier to proliferation.

If in the long run nuclear power comes to produce an even more significant proportion of world energy, the safeguarding of weapons-usable materials will become still more daunting. A nuclear explosive device can be constructed with less than 10 kg of plutonium, while a 1000 MW power reactor produces more than 200 kg of plutonium per year. It is difficult to imagine human institutions capable of safeguarding these plutonium flows against occasional diversions of significant quantities to nuclear weapons.

2.5 Energy and Global Issues: The Implications

In this chapter, the linkages between energy and social, environmental, economic and security issues have been demonstrated. Most present trends in energy indicate a deteriorating situation. Furthermore, current energy patterns are aggravating this process by an over-preoccupation with centralised energy supply and fossil fuels to the detriment of energy efficiency, decentralised supply and renewable energy. The development of the world energy system at large continues along the trends established before Rio. In other words, major global problems are making the world more and more unsustainable and business-as-usual energy patterns and conventional approaches to energy are contributing to this unsustainability.

current energy patterns contribute to unsustainability

Thus, any attempt to tackle the social, environmental, economic and security issues as done by the UN conferences must pay full attention to their energy aspects. Energy strategies, policies, programmes and projects must contribute to, and be consistent with, the solution of major global issues. Energy issues must be tackled in such a way that the other problems are not aggravated. On the contrary, energy policies which provide a better balance between conventional sources and renewables and efficiency improvements will have powerful direct, and indirect, influences on solving many of the global issues identified.

energy must be viewed as a means of contributing to the solution of major global problems

Energy needs to be looked at with an end-use orientation, an energy service viewpoint. The traditional supply-side approach alone does not adequately consider the opportunities and potentialities arising from changes in energy demand, improvements in energy efficiency, shifts from traditional to modern energy sources, dissemination of new technologies, etc. What is important now is to take an integrated systems approach, giving attention to technological and institutional innovations on both the demand and supply sides.

Energy must be viewed, therefore, as a means of contributing to the solution of major global problems. In fact, the global goal for energy can be stated very simply: sustainable development of the world. Energy must be an instrument for the achievement of sustainable development.

energy must be an instrument for the achievement of sustainable development

This implies that energy strategies and policies should satisfy five fundamental criteria: economic efficiency, equity (particularly for the poor, women and those located in remote areas), empowerment/self-reliance, environmental soundness and peace. Together, these components can be taken as a measure of sustainable development.