‘Resource Futures’: good new report on how to confront resource scarcity and conflict

Looks like this is going to be crystal ball week on the blog – must be the time of year. Just read Resource Futures from Chatham House (inventors of the ubiquitous Chatham House Rule). The analysis is pretty good, but it really raises the bar on communication, with great interactive infographics and killer facts. Advocacy wonks everywhere, take note.

The paper summarizes the key trends and flashpoints in global resource use, including:

• Resource trade has grown nearly 50% from a decade ago in weight terms owing to expanding trade in oil, iron and steel, coal, oilseeds and cereals
• Large-scale resource extraction remains concentrated in a handful of countries (China, the United States, Australia, the European Union, Brazil, Russia, India and Indonesia)

And then boils it all down into 5 ‘key findings’:

Volatility is the new normal

Volatility (see graph), driven by shrinking ‘buffers’ (eg reserve stockpiles) is spurring resource nationalism and needs to bedampened down by government and international action. The report has some clever ideas on how to design price smoothing mechanisms for oil, food and metals.

Environmental change and degradation are challenging traditional approaches

Environmental boundaries are starting to bite, notably climate change and water scarcity. Not much new in the way of ideas here (remove fossil fuel subsidies, improve water-sharing agreements etc), more ‘just do it’.

Trade as a frontline for resource conflicts

‘Trade is becoming a frontline for conflicts over resources’. Interesting – trade wars on the way back, eg over unilateral export bans by food producers, but in a different guise from the old WTO style struggle over import liberalization

Resource politics matter

‘Resource politics, not environmental preservation or sound economics, are set to dominate the global agenda and are already playing themselves out through trade disputes, climate negotiations, market manipulation strategies, aggressive industrial policies and the scramble to control frontier areas.’

Likely flashpoints that will need international action include resource production in highly eco-sensitive areas like the Arctic and ‘extreme engineering’ such as weather modification. The report picks up Alex Evans’ suggestion for a high profile annual ‘State of the World’s Resources’ report.

Collaborative governance is the only option

The report’s main big idea, in terms of policy proposals, is to set up a ‘new club of the world’s principal resource-producing and -consuming countries to fill existing governance gaps on resource and scarcities governance. This ‘Resources 30’ or R30 grouping, conceived as a ‘coalition of the committed’, would comprise leaders and officials from thirty countries of systemic significance as resource producers, consumers, importers or exporters.’

And here’s report co-author Bernice Lee introducing the findings

To close the energy poverty gap, we need ideas, investment…and natural gas. Todd Moss responds to Hannah Ryder

CGD’s Todd Moss responds to Hannah Ryder’s critique of his ‘let them burn fossil fuels’ line on energy poverty

Thanks to Hannah for raising some good questions about my proposal that the US agency OPIC partially exempt the world’s lowest-income, lowest-emitting countries from the greenhouse gas cap. I think we both agree that 1.3 billion people without access to electricity in the 21^st Century is inexcusable. It’s a development problem that can and should be solved. We also agree that the past approach to power has been insufficient, and that to close the energy poverty gap we need new ideas and new technologies. Here’s where we disagree:

• Greater investment is necessary if we want to close the energy poverty gap. The data on additional generation capacity and access do not, as she suggests, show that increases in the former have no relation to decreases in the latter. Rather those IEA graphs in an apples-to-apples (global-to-global) comparison show the opposite: a clear decline of roughly 25% between 1985-2000 in the total number of people without access to electricity. Yes, this decline is driven by East Asia, but this is also likely to be precisely where the bulk of the investment and capacity additions have occurred (IEA doesn’t provide ungated data on capacity addition disaggregated by region – I’d love to see that). More recent estimates (in World Energy Outlook 2011) show that the number of people without electricity has continued to decline by some 300 million in the past decade. In other words, is seems safe to assume that where massive investment takes place (e.g., China), millions of people are gaining access to power. Thus, the conclusion, including in the paper Hannah cites, is that even more investment is needed (they suggest 5x current levels). If this is the case, it seems odd that we would question whether capacity should really increase or, worse, hamstring our agencies tasked to boost this investment with environmental mandates that have nearly zero effect on global emissions targets.

• Off grid renewable may be better, but it’s not realistic everywhere. Certain populations may benefit from new technologies and new models, such as off-grid renewable sources. We should absolutely leverage our policy tools to deploy these where we can. But the scale of the problem is such that sizeable populations will still require old-school on-grid power that is (at least based on current economics) probably going to come from fossil fuels. This is especially likely for underserved urban populations and heavy industrial projects. This World Bank paper reports that barely half of poor residents in Dakar and Nairobi have access to electricity.  Reaching the rest will come, not from some high-tech solar system, but from hooking up more homes to the grid and boosting generation capacity in big power plants. Ditto for the 97% of large firms in Nigeria that rely on (costly, inefficient, and polluting) diesel generators to provide nearly 2/3 of their power. Similarly, Ghana’s Valco aluminum smelter in the industrial port of Tema is running at 20% capacity for the sole reason of a shortage of low-cost power. Getting Valco to capacity, with all the jobs and spin-off industries that would accompany full production, is going to require new power investments in large-scale power.

• Natural gas will be part of the solution. My proposal specifically excludes coal, but not natural gas. This distinction is partly political, but it’s mainly pragmatic: many of the same countries that have substantial energy poverty gaps also have natural gas reserves that could be transformed into domestic energy.  Just in Africa in the past few years, Kenya, Tanzania, Mozambique, Ghana, and Cote d’Ivoire have had major new gas finds. And Nigeria still flares much of its gas. Why should we stand in the way of these countries turning these resources into electricity and jobs for their people? We shouldn’t—especially when we have placed no such constraints on ourselves.

Why high carbon energy is the wrong solution for low income countries

DFID staff break their duck as guest writers on FP2P with this post from Hannah Ryder (right), a regular blogger on the DFID site and Senior Economist specialising in climate change and low carbon growth

Economists have a reputation for being sceptical – there is even a book called “the Skeptical Economist”. This has a lot to do with how it is taught. For instance, we are encouraged to be sceptical of the idea that one thing (a “variable”) might directly cause another variable to change. A number of development economists have recently been stressing that “complexity” should make us even more sceptical of these relationships.

Now, I usually avoid wearing the sceptic’s hat. But the other day I came across an article that assumed a linear, causal relationship between two variables. The article was by Todd Moss at the Center for Global Development. He was arguing that the American organisation that provides investment to developing countries “OPIC” should be able to help low-income countries invest in high-carbon energy – such as coal or diesel powered stations, to help stimulate access to energy in those countries. He argued that the limits that OPIC has on this kind of investment are “strategically counterproductive and morally dubious”.

I, like Todd, certainly feel strongly about access to energy. Around the world, 1.3 billion people have no access to electricity. Over 80% of those people live either in sub-Saharan Africa or in South Asia. Access can vary dramatically within regions – over 95% of people lack electricity access in Chad and Liberia versus 25% in South Africa. Although problems are currently worse in rural areas than urban areas, even so about 56% of urban dwellers in Sub-Saharan Africa lack access to electricity.

Han’s Rosling’s latest TED talk cleverly explains why increasing energy access helps reduce poverty. It can expand people’s choices and productivity, particularly for women. It also helps business. A recent survey of manufacturing firms in Nigeria showed that 83% of respondents identified electricity as their top problem. In many cases, even when people or firms get access to electricity they still suffer from blackouts (such as experienced recently in India) and lack of affordability. Related problems exist in developed countries. In the UK, around 19% of households were “fuel poor” in 2010 – meaning they had to spend over than 10% of their income on fuel for adequate heating. Energy poverty matters.

The problem is that, from a quick skim of historic data, there is no good reason to expect that investment in conventional high-carbon energy will solve the energy access problem. These two graphs from the 2003 and 2002 IEA World Economic Outlooks (respectively) illustrate:

Although the dollars invested in the power sector and installed capacity – most of it based on conventional fuels such as coal, gas and oil – have increased strongly since the 1970s, the number of people with access to electricity has increased somewhat, but not a great deal.

Of course, the problem couldsimply be population growth outpacing investment growth, but the data suggests it isn’t. A 2011 study by a set of global energy experts foundno distinguishable relationship between investment in energy infrastructure and the degree of energy poverty once you control for total population. These expertsinsteadsuggestedthe problem was inequality.  Effectively, in many countries, new energy investment tends to benefit people that already have access. They therefore recommended a five-fold increase in overall energy sector investment in low-income countries, particularly in grid extensions, off-grid solutions and renewable energy – rather than the conventional, high-carbon methods used to date.

Added to this, looking forward, reports such as the European Report on Development and McKinsey’s Resource Revolution provide evidence that commodity prices are likely to rise and become more volatile in future. A number of economists such as Shalizi and Lecocq think some developing countries might regret building infrastructure now that locks them into needing to buycoal or oilor relying excessively on their volatile revenues. While there isn’t much evidence on this yet, it’s probably sensible for most countries to begin to plan for a diversified energy sector, especially if they are also going to try to target poor energy consumers more strongly in future.

These are the reasons why I was sceptical when I read Todd Moss’s article calling for OPIC to invest in high-carbon energy. It’s also why the UK supports the UN Secretary General’s Sustainable Energy For All Initiative, and why DFID specifically helps low-income countries invest in diverse sources of energy, particularly through vehicles such as the Scaling Up Renewable Energy Program, the Results-based Financing Facility and Green Africa Power. Pushing OPIC and others to look in new directions and help forge a new relationship between investment and energy access might actually be a good thing. And with that, I shall remove off my sceptic’s hat.

Todd Moss responds tomorrow

Confronting scarcity by managing water, energy and land: the new European Report on Development

I have skimmed a few of the curtain raisers for next week’s Earth Summit in Rio, and sure enough, they fall into the familiar pattern of ‘If I ruled (or at least ‘managed’) the world’ documents: a summary of the research evidence, a call to arms (in this case save planet and species, preferably both), and a shopping list of policy recommendations.

In such reports, all solutions seem to be win-win. Beyond vague appeals for political will, there is almost no discussion of politics (there’s an election going on in the US – do you think that might be germane?), power (who gets to decide what, and what are their motivations) or the chain of events (shocks, elections, scandals, cumulative pressure from citizens, peer pressure from governments) that might possibly lead to something being agreed. Reports typically employ the passive tense – ‘innovation/cash/leadership is needed’, neatly avoiding having to identify just who has to do it, and why they might decide to do so.

Exhibit A: ‘Confronting Scarcity: Managing water, energy and land for inclusive and sustainable growth’ is the latest European Report on Development. I’ve been a bit rude about the ERDs in the past, but within the limits of the genre (see previous para – the exec sum has 84 uses of ‘manage’ or ‘management’, but only 8 of ‘politics’, ‘political’ or ‘empowerment’), this one’s actually quite good, in that it joins up issues and thinks in terms of whole systems. I think the ‘DSER framework’ (see below) may also stick. Highlights:

“This Report focuses on water, energy [actually, only renewable energy] and land (see graphic). It examines the constraints on each, the interrelationships between them and then considers how they can be managed together to promote growth in developing countries that is both socially inclusive and environmentally sustainable.

All actors must consider the full range of options in managing pressures on water, energy and land. So far the focus has been on partial solutions: Businesses emphasise the opportunities in increasing supply and raising resource efficiency; the green economy concept at Rio+20 highlights enhancing the resource base, resource efficiency, and sustainable consumption and production; NGOs highlight fair resource shares for the poor; others emphasise resilience against climate shocks. This ERD argues that the scale and urgency of the problems require transformative action in a combination of four pillars (DSER):

•  influencing demand patterns to reflect scarcity values (e.g. sustainable consumption and production by cutting waste and changing lifestyles)
•  improving the quantity and quality of supply (e.g. partnerships on renewable energy, soils, water storage through appropriate finance, regulation and knowledge sharing)
• increasing efficiency (e.g. technology transfer, national innovation systems)
•  increasing resilience against shocks and benefits for the poorest (e.g. benefit-sharing, social protection, Corporate Social Responsibility, inclusive land policy)

Action is particularly required in five areas:

1. Radically reduce the environmental footprint of consumption (especially, but not only, in developed countries such as the EU) to promote inclusive growth without increasing resource use.
2.  Promote innovation to increase agricultural productivity to feed more than 9bn people sustainably by 2050 and scale up renewable energy technologies that help to deliver sustainable energy for all by 2030.
3. Establish or reform institutions for an integrated approach towards managing resources.
4. Push for inclusive land policy to ensure access to land and water for the poorest and most vulnerable.
5.  Price natural resources and services comprehensively and appropriately (e.g. using instruments such as payments for ecosystem services, PES), whilst safeguarding the welfare of the poorest.

And a couple of other choice quotes:

“The new context for the management of natural resources poses severe risks for both inclusiveness and sustainability. The world has already trespassed three of the nine planetary boundaries within which it can operate safely: biodiversity loss, nitrogen and phosphorus loading and climate change. Ocean acidification and freshwater boundaries are expected to be next in the coming 50 years. The risk that tipping points are being reached, or will soon be reached, will jeopardise the future wellbeing of the poorest, who will be the hardest hit by environmental degradation. Applying the technology that lay behind the Green Revolution of the 1960s will not sustainably produce food for 9.3 billion people by 2050. The Earth’s natural resource base does not allow developing and emerging economies to reach consumption patterns that developed countries have followed and continue to follow (e.g. a reliance on meat consumption), hence distributional issues will have to be addressed, especially since technological progress has not been sufficient to decouple consumption of natural resources from economic growth.”

“Countries and groups that possess relevant assets will have new opportunities, but these come with social and environmental risks. Less well-endowed countries, regions and groups face different types of risks and opportunities (e.g. parts of northern China, India, Middle East and Southern Africa have little water, while countries such as Ethiopia, Ghana, Madagascar and Sudan have large tracts of land).”

There are good case studies on biofuels, managing the WEL Nexus in Kenya (see video) and the Brazilian ag boom.

Has anyone read any other particularly good curtain raisers, preferably with at least some discussion of power and politics? (and no, you’re not allowed to suggest your own…..)

How do we talk about resource limits, fair shares and development?

Fascinating morning earlier this week discussing Alex Evans’ new paper for WWF and Oxfam on ‘Resource Scarcity, fair shares and development’. Alex summarizes the paper in the Guardian, so I won’t rehearse his arguments for adding ‘fair shares’ to the more accepted topics of responding to resource scarcity by increasing production and strengthening resilience. Instead, here are some reflections coming out of the discussion + paper.

First, language is a minefield on this topic – taboos and neuralgic issues are everywhere. On the left, ‘scarcity’ offends the Amartya Sen fundamentalists who insist that ‘there’s enough food/water etc and distributional justice is all that matters, (and always will be)’; on the right, any talk of ‘limits’ leads to accusations of neo-Malthusian scaremongering – ‘scarcity will lead to price rises, which in turn will send signals to the market to innovate or substitute for expensive resources, so relax and above all, avoid regulation!’ Whether explicitly or implicitly, both left and right assume away limits – the cake can go on growing forever. I caricature, but not much.

The reaction from some of the government officials present on the question of limits was pretty discouraging. As one government rep at the meeting said, ‘even if limits are a subtext, the message is tainted. Zero sum games are just not attractive to politicians’. I ended up thinking that, in Europe at least, it may well be easier to talk about fair shares and distribution, than to broach the issues of resource limits.

On a more positive note, Alex adds a nice twist in his paper by portraying the problem of scarcity as a transitional one. The world faces impending resource crunches on atmospheric space, water, land, energy etc. In the end, the price signals and technological responses, combined with a plateauing and then decline in world population, may well eventually respond, but only with time lags. In the meantime, we need to think about how to protect poor people who are likely to come off worst in world of resource limits – the ‘fair shares’ agenda.

Second, I found myself wondering what an Andean peasant would make of all this talk of scarcity as if it is something new. We need to be clearer on the distinction between ‘new scarcity’ and ‘old scarcity’ and how they connect. Any poor person can talk to you about resource constraints – on water, land, energy etc and in many cases these are more immediately pressing than the ‘new scarcity’ produced by humanity approaching planetary boundaries. Old scarcity is local and political. New scarcity is both local and global, and has an absolute quality missing from old scarcity which, as Sen pointed out, is largely socially determined. Focussing exclusively on the global ‘new scarcity’ aspects would be a mistake – for example only talking about land in terms of land grabs by foreign investors, when in many cases the grabbers are local elites, and they have been doing it for centuries – this is just the latest price-driven twist in a long history.

Linked to this point is the need for a clearer typology of scarcities. It might be helpful to think about scarcity as lying along at least two axes: local to global in terms of where the responses are most effective, and in terms of the nature of the problem – public good to private good (i.e. whether the good can be privately owned like land, or is a common good, like air, or is somewhere in between, like water). Plotting this on a standard 2×2 matrix (see right for a very rough go at this) suggests that climate change/ limits to atmospheric space is the exception – most of the scarcities we are talking about are more local than global in their solutions, and more private than public in their nature. That suggests that we should be careful about lumping them all together or going too global, especially when it comes to solutions.

Final point. While lumping them together may not be a good idea, comparisons certainly are – cross fertilization can throw up some interesting ideas. Is water scarcity best approached purely through building adaptation and resilience, or is there (learning from climate change) something equivalent to mitigation – cutting water use, at least at national level? Would a water or land equivalent of the International Energy Agency be worth thinking about? Parallels with other major crises also might be helpful – why are limits so hard to accept on the use of resources, when they are seen as common sense in financial management – time for some eco-Thatcherite ‘you can’t live beyond your means’ messaging? In teh same vein, there’s eco-bubbles, eco-meltdowns, but sadly no eco bailouts.

And some weekend background viewing, a TED talk from Johan Rockstrom, the author of the ‘Planetary Boundaries’ concept – fascinating science and determinedly upbeat about the possibilities of survival if we act now. We could have done with him at the seminar……. [h/t Phil Bloomer]

When energy comes to a Senegalese village, do people get more healthy, wealthy and wise?

John Magrath is an Oxfam researcher currently working on renewable energy

Hats off to Sarah Best for her recent post on energy and in particular, for highlighting the excellent new Practical Action report, Poor People’s Energy Outlook 2010.

I’ve been delving into energy issues too lately. I’ve just come back from Senegal, where I was trying to get clearer in my own mind what exactly is the contribution energy access makes to making people healthier, wealthier and wiser? And what are the limitations, and essential other things that have to be added to the mix to make the dough of development rise?

So I went to a village that is well off the national grid, which has a “renewable energy power station ” – a wind turbine towering above the baobabs and an imposing inclined plane of solar panels, all connected to a hefty bank of industrial-sized batteries. Overhead cables snake off to every house. People pay any one of four tariffs, based on how much power they use, from 50 watts up to 200 watts – enough for a set of light bulbs and a TV.

My overall impression was – what a real and rare pleasure to go somewhere where people were happy – and told you so? Everyone seemed really delighted, confident and optimistic about the future. This sense of confidence and security, and therefore, ambition, seems to me the biggest impact of having electricity. Exuding a new pride in the village, people talked about a “revival of the town”, – how young people who had left for the capital were coming back, people from surrounding areas were coming in buying land and building houses (a building boom was visibly in progress). This confidence is based on people concretely getting wealthier; the women I spoke to all said they were making big savings by no longer buying kerosene, and they were earning more – they could make and sell things late into the night, more people were coming round to buy, they could sell cold drinks, invest in getting goods from further afield etc.

So, people are both mentally healthier and economically wealthier, thanks to electricity; if I was giving energy a score vis-a-vis other interventions, I’d have said this was a 100% winner of an effect.

What about wiser? People pointed to two developments. They said, “before we only had two TVs, now we have 31; we are smarter, we are more cultivated, we know what’s happening around the world”. Ah, the development benefits of TV….when, I can’t help wonder, do the benefits of TV as an educational medium disappear and get overtaken by the Senegalese equivalent of Big Brother? The second thing mothers said was how their children could (and did) study longer, and that their school exam results were much improved.

However, I think the reasons behind education benefits are more complicated, and electricity is only one of several. The school was well equipped, with desks, books and wall charts. The teacher – who, like the electricity, had started about a year ago – was clearly very good, even inspirational. And it turns out the exam results were up all over the country this year. So, I’d credit electricity with, say, 50% of the effect.

Finally, how much does electricity contribute to a (physically) healthier society? There are certainly effects – if kids have to gather round a candle or a smelly, flickering kerosene lamp to study, then they may well develop eye strain and lung and throat problems. (Women still cook on firewood, so smoke remains a health hazard). The school teacher said that in his opinion, one of the best impacts of bright electric light was that children with weak or damaged eyesight were no longer disadvantaged – “everyone is on the same level now”, he explained.

However, when people talked about health, they also made a lot of how because of light, attendance was up at the village health centre. I might have taken this as an indicator of success, had I not asked to see the health centre. The new electric bulb illuminated a scene of filth and squalor. Clearly no-one knew how to take care of the centre or the medicines and instruments, only how to fill out the attendance book. So in these circumstances, electricity => more attendance => possibly worse health and greater risk of death….a negative correlation with energy! It’s almost an argument for removing the bulb….It is also most definitely an illustration of how many other things must be in place to create beneficial outcomes, and how energy on its own may be a necessary, but is by no means sufficient, to bring about change.

What should Oxfam be doing on renewables? Your advice, please

Wisdom of crowds time. We’re doing some thinking on renewable energy and energy poverty (which affects about 1.5-2bn people), and thought we’d pick your brains. My colleague John Magrath has written this guest blog as an opener, and I’ll run a few posts on energy-related issues over the next few days. Over to John:

As an NGO we’ve never done much work in the field. But increasingly, we’re deploying renewables because they make financial sense for

solar lamp-lit foodstall in India

communities and for us – such as solar panels to pump water in Turkana. Now with thoughts of “low carbon development” increasingly in mind, a number of Oxfam country offices are thinking of trying something on a larger scale. But what exactly? We don’t want to duplicate what others are doing, or, it has to be said, go the same way as the many attempts at renewable energy programmes that have only partially succeeded, or even failed outright.

A classic example of partial success appears to be the much-heralded roll-out of “multifunctional platforms” (MFPs) across West Africa. Championed by UNDP, these are diesel engines to operate milling machines and a generator to produce electricity, to be owned and operated by women’s organisations, and ultimately, powered by renewable fuels in the shape of jatropha grown by the women.

MFPs tick all the donors’ boxes – innovation, production, income generation, light, gender, renewable energy etc….But writing in Energy Policy (vol 38 (2010) 1192-1201), Ivan Nygaard finds MFPs are not multifunctional at all – they can only do one thing at a time and most of them end up only milling. What is more, many of the women’s organisations might still own an MFA, but employ a miller to run it. Nor has jatropha proved to be a viable fuel, and has been quietly dropped from new programmes.

This seems to illustrate a key dilemma. So far, neither the market nor the state have been sufficiently effective in providing enough people with the different forms of energy that they need. And to fill the gap in the middle, and with the best of motives, have swarmed all sorts of worthy initiatives – but – I sense – to relatively limited effect.

There’s incredible inventiveness and dynamism in the middle, inventing “stuff” like new stoves and creating new business models, to reach the base of the pyramid – a bewildering hybridisation of social entrepreneurs, NGOs, civil society organizations and social investors. But most of those “models” turn out to be little more than projects and not replicable.

As the MFP example hints, maybe it would be sensible to start by enrolling existing small businesses – like millers – instead of setting up new (and less efficient, supposedly co-operative) associations to run things….

how to get to scale?

Maybe we have to be clearer about what the market can effectively deliver, and find ways to support and link both entrepreneurs and potential customers. The market is increasingly good at supplying “gadgets”, small stuff (but with big welfare impacts) for individual or household use, notably solar lanterns. What the market can’t provide is generally anything big that requires an upfront investment that poor individuals or communities can’t afford.

On the other side, maybe we have to renew demands on governments to provide energy as a public service. In Nepal a new consumer movement of electricity user groups is campaigning to extend the grid into villages and has already electrified 176,000 rural households in a little over four years. The 20:80 scheme – communities contribute 20% of the cost of connection, the government 80% – is “communitising” the grid. Despite the long and frequent power cuts, many people prefer power from the grid to the hassle and costs of maintaining off-grid power plants. Communities assume a role in running their grid locally and making it more efficient. See Down to Earth (vol 18, no 24, Monday, May 03, 2010).

So, readers, am I being naive or foolish to think the state or the market can be reformed/transformed to provide energy needs? Am I underestimating the vibrant potential of initiatives in the middle? And where do you think Oxfam could go with this?

Ending energy poverty in India is part of tackling climate change

Energy for all
Is vital in India
Can outsiders help?

NGOs don’t often talk about energy poverty and they should. Electricity means kids are more likely to do their homework; dirty energy for cooking fills the houses of the poor with smoke and does terrible damage to health. Two recent items in my inbox brought this to mind. Firstly a post on the the excellent new blog Political Climate:

‘Climate negotiations tend to focus on whether countries such as India can be persuaded to take on some form of quasi-binding emissions limitation target. Our view is that it would be far better to engage in a technology-specific negotiation. With 300 clear sunny days per calendar year, solar is the obvious priority (although there would and should be others). So the key India question is; what can international cooperation achieve in dramatically reducing the unit cost of electricity from solar?

Until the climate negotiations or other global processes focus in on the aspects of the debate that really matter to the political economy of major emitters (and those with the potential to become so, which is how India would see itself), they are unlikely to be moved. Why would they be?’

That arrived about the same time as email from our office in New Delhi, reporting a discussion on some new research from the Vasudha Foundation “Shifting of goal posts: rural electrification in India” (can’t find a URL for the paper, but would love to receive it).

In India, 54% of rural households have no access to electricity. Progress on electrification in rural areas has been very slow over the last two decades. Kerosene is the main source of energy used for lighting in rural households without access to electricity.

let the sun do the cooking

Even in the rural villages with electricity, supply is very limited, from 3 to 6 hours a day (in the villages surveyed for the research). Most of this supply comes at night (sometimes even after 10 p.m., so not very useful). Quality of the supply is also an issue, as voltage varies a lot (which can damage equipment, especially pumps used for irrigation). As a result, many villages prefer diesel irrigation pumps and are using electricity only as a back up system.

Vasudha Foundation is calling for a shift from a centralized production model (i.e. villages connected to a grid where electricity is produced by massive power plants using coal or nuclear) to a decentralized model, based on small units at village level using renewable energies (solar, micro-hydro, wind, bio-mass).

Nice idea, but can it work? The seminar gave a mixed answer for the following reasons (in no particular order):

Centralised versus decentralised is not the right question. Villages need both and both systems can complement one another. Production of electricity at village level based on renewables needs to be connected to the grid to be a sustainable business model (capacity to sell electricity surplus when too much production and capacity to get electricity from the grid when generation falls). That means that the power purchase agreements between the firms managing the grid and the small units at village level are very important. In India, this market is weighted against small/decentralized production units.

Each kind of renewable has its own problems: solar needs large storage capacity; micro hydro is often seasonal (example in India of villages in Himalayas getting micro hydro during part of spring, and summer and autumn but nothing during winter time, as rivers/streams are frozen); bio-mass is renewable and year-round but comes at a cost.

Massive scale up of small-scale renewables will only happen if it is seen as a successful business model. There’s evidence that is happening, notably, beginnings of mass production of really reliable, robust, bright and cheap – hence desirable – solar lanterns.
However – in India at least – renewables face unfair competition. Electricity generated from coal or nuclear (nuclear is marginal in India, anyhow) is heavily subsidised.

In India, both the government and the private sector (despite what they claim) are not really interested in a model of decentralised renewable energy. The private sector would be interested if it was making a profit, meaning if these systems were connected to the grid to sell surplus and these surplus were bought at an adequate price. Interest from the government is more in large units using renewables rather than small scale village level production.

However, most people in rural India are happy to pay for access to quality energy. So solutions could be explored. But problems of scale will remain.

Putting the two together, could the international community do more to help turn small scale renewables into a viable business proposition in India? For more background, see Greenpeace’s ‘Energy [r]evolution: A Sustainable India Energy Outlook’. The Ashden Awards for Sustainable Energy had a conference on this in New Delhi in February – skimming the presentations they seem to focus on technologies, acceptability issues and finance. Finance is crucial and Indian organisations like Selco have been pioneers in advocating wide-ranging financing reforms, from micro-credit to the willingness of banks to lend to energy entrepeneurs. Why not earmark international carbon finance (e.g. the Clean Development Mechanism) for a massive international push to provide mass-produced efficient stoves and solar lanterns? But before we get too captivated by technical solutions, maybe we should look further at the public policy issues that may be behind the reluctance to act.  

Anyone got other info on what’s already happening?

How is Climate Change affecting South Africa?

Here’s my ’summary of the summary’ of a report published today by Earthlife Africa and Oxfam International.

‘In climate terms, South Africa is already living on the edge. Much of it is arid or semi-arid and the whole country is subject to droughts and floods. Even small variations in rainfall or temperatures would exacerbate this already stressed environment. Most South African crops are grown in areas that are only just climatically suitable and with limited water supplies.

But that climate is set to change for the worse because of rising global emissions of greenhouse gases. Indeed, there are already ominous signs of change – dry seasons are becoming longer and wet seasons starting later. Rainfall is reported to be becoming even more variable, with rain coming in more concentrated, violent bursts. Read More …

What has Obama said about aid, development and climate change?

I’m in the US for a couple of weeks to promote the book round universities and thinktanks (details here). But an added bonus is to experience the new mood in Obamerica. I won’t add to the mountain of op-eds and blogs on the global and historic significance of seeing a black family in the White House. Or to the gigabytes of ‘advice’ on what the new administration should do first. Instead let’s look at what he’s said so far on aid, climate change and development. Read More …