Renewable energy can help reduce global poverty, says report

Posted: 23 June 2004

A fast approaching global energy and climate crisis threatens to reverse human development, says a new report.

The Price of Power, released by the New Economics Foundation (Nef) says that the spiraling costs of climate change and dwindling supplies of oil will undermine UN targets to reduce global poverty, unless there is a major shift towards renewable energy. If not, all countries will suffer a progress-reversing energy shock, the report warns.

UK-designed Marlec wind turbine provides nomads with lighting and power to run their radio in their yurt, Mongolia.
UK-designed Marlec wind turbine provides nomads with lighting and power to run their radio in their yurt, Mongolia.
UK-designed Marlec wind turbine provides nomads with lighting and power to run their radio in their yurt, Mongolia.© Peter Fraenkel
However, even a small shift of support away from fossil fuels toward clean renewable energy could save millions of lives and help avert global warming.

"Renewable energy is the great, barely-tapped solution to the two great challenges of the coming century - poverty and global warming," says Nef.

The "business-as-usual" development strategies based on fossil fuel use are self-defeating, says the report. The costs of 'natural' disasters mostly linked to global warming hit $60 billion in 2003.

Ending subsidies

Currently renewables account for around 13 per cent of global energy supplies. To create a shift towards renewable energy, Nef is calling for an end to "distorting subsidies" on fossil fuels and proper investment in clean energy.

The report highlights that one year's worth of World Bank spending on fossil fuel projects could instead be spent on small-scale solar installations in Sub-Saharan Africa, providing 10 million people with electricity.

And, says the report, a year's worth of global fossil fuel subsidies could comfortably pay off Sub-Saharan Africa's entire international debt, with billions of dollars left over.

The report says that subsidies to coal, oil and gas, measured conservatively at around $235 billion per year, directly distort the global economy and hold back the development of renewables.

Carbon cost

Furthermore, the direct costs of damage caused by the emission of carbon dioxide, the principal greenhouse gas are not factored into the price of fossil fuels. The UK government estimates these costs at £50 and £200 per tonne.

"Around the world control of fossil fuels is linked to corruption and violence. Burning them causes climate change which in turn puts an impossible obstacle in the way of ending poverty. Reshaping our energy supply holds the secret to ending poverty and preventing global warming. Small-scale renewables remain the best answer for communities and the environment," said Andrew Simms, Nef Policy Director.

The report highlights the potential - and success - of small-scale renewable energy projects around the world:

  • In India a pilot project in Bhopal, a city still suffering the after affects of its lethal chemical encounter with development, is providing cleaner and cheaper lighting for street vendors with solar lanterns.

  • In Kenya, a switch from charcoal to environmentally-friendly briquettes means a saving of 33 per cent on energy bills.

  • In Mongolia, small household-scale wind turbines have added up to $30 to $150 in income per month.

  • In Bangladesh, community solar-powered cell phones have produced up to $200 per month in revenue for women who primarily operate the phones in their homes.
The report calls for governments to adopt key measures to increase the uptake of renewables. These include: implementing the target set by the G8 group of industrialised countries to provide at least one billion people with renewable energy by 2010, and increasing the target of access to clean energy to two billion over the next ten years.

Reforming international financial institutions and export credit agencies to enable a dramatic increase in funding for renewable energies in developing countries.

Phasing out World Bank Group subsidies to fossil fuel projects by 2008 and government subsidies for fossil fuels and nuclear energy.

Related links:

New Economics Foundation

SunMin (SunMin is a small business promoting solar energy lights for the use of the urban poor in Chennai).