The New Energy Equation for Developiflg Couflhies nergy h a s long been recognized as a key to development for the 4 billion people who 'e in Africa, Asia, d Latin America. and funding institutions, Among aplanning virtually
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unquestioned assumption is that an expanding energy supply is the necessary foundation for expanding industries, providing jobs, and raising standards of living in the developing world. Unfortunately, that assumption has not worked according to plan. Developing countries have been quite successfully boosting energy consumption: Energy use has increased more than fourfold since 1960, and per capita use has more than doubled. Yet the strategies that were so successful in achieving this growth have left these nations staggering from oil price shocks, struggling with foreign debt, suffering from serious environmental and health problems, and still facing severe energy shortages. Despite the rapid rise in Third World energy use, the income gap between the developed countries of the Northern Hemisphere and the developing countries of the Southern Hemisphere is widening. In 1960, the people in the richest fifth of the world's countries received 30 times more income per person than those in the poorest fifth. Yet by 1989,despite more rapid energy development in the South than in the North, the disnaritv had widened to 60-to-1 ( I ) . Incomes declined in the 1980s partly because developing economies were saddled with backbreaking debts to foreign banks and governments. These debts totaled $1.35 trillion in early 1992 (21.And as debt I~
220 Environ. Sci. Technol.. Vol. 27, No. 2, 1993
deepened poverty, rising energy use deepened the debt. In the 1980s a quarter of the money developing country governments paid to northern creditors went to pay off past energy projects (3). If developing countries are to achieve the hoped-for gains in living standards, they need to meet their energy needs in a way that allows them to close the gap between the North a n d the South instead of falling farther behind. They cannot hope to d o this simply by expanding energy supplies as they have in the past. The way out of this dilemma is to focus on providing the energy services such as cooking, lighting, and increased agricultural productivity, which are the real keys to economic and social development. Developing countries can accomplish this change by following a twopart strategy: first, emphasizing the use of more energy-efficient technologies in everything from industrial processes to consumer products; and second, meeting the remaining need for new energy supplies by developing less costly and ecologically destructive approaches than those they have pursued to date. With this strategy, developing countries can "leapfrog" to the advanced technologies being commercialized in industrial countries today, avoiding billions of dollars of misdirected investments in infrastructure that is economically and environmentally obsolete. A concerted move toward efficiency would also lead to greater employ-
ment, a major benefit in Third World economies that are labor rich and capital poor. Finally, and of critical importance to the health of the global environment, an efficient energy system would delay global warming by slowing down the increase in carbon emissions. Over the next 35 years, $350 billion invested in efficiency improvements in industry, agriculture,
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buildings, and transportation could eliminate the need for $1.75 trillion worth of power plants, oil refineries, and other energy infrastructure. This would open the way for vastly larger investments in food production, health, education, and other neglected needs ( 4 ) . Such widespread savings are not just paper prophecies. In 1980, China launched an ambitious efficiency program to improve energy use in major industries such as steel a n d chemicals. Efficiency gains were found to be one-third less expensive than comparable investments in coal supplies. Had the nation failed to make such progress, energy consumption in 1990 would have been 50% higher than it actually was or, more likely, economic output would have declined (5,Figure 1). In Brazil, the National Electricity
001 3-936W93/0927-220$04.00/0 0 1993 American Chemical Society
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Conservation Program invested $20 million to improve electrical efficiency in lighting, refrigerators, and electric motors. That small investment reduced the nation’s need for new power plants and transmission lines by roughly $1 billion in the late 1980s. By making broader investments, Brazil could costeffectively eliminate 42% of its projected growth in electricity consumption by 2010 (6). Even with massive improvements in efficiency, the Third World will need to develop its own alternatives to costly oil and polluting coal. Many developing countries have extensive, unexploited reserves of natural gas, which could supplant oil and coal use in buildings, transport, industry, and power generation. Some 50 developing countries possess such stores of natural gas. In some countries, natural gas is considered a waste product of petroleum production, and it is flared into the open air. In Nigeria, the 2 1 billion cubic meters of gas flared in 1990 could have furnished enough energy to meet all the country‘s current commercial energy use, plus that of neighboring Benin, Cameroon, Ghana, Niger, and Togo (7; Boden, T., Oak Ridge National Laboratory, personal communication, 1992). All developing countries have enormous potential to rely on solar, wind, biomass, or geothermal energy resources. Driven by technological advances and cost reduct i o n s , Western c o u n t r i e s a r e increasingly pursuing these options. In developing countries the opportunities are even greater. Decisions they make today will determine how readily they tap these resources in the future. The cost of solar and wind electricity systems has fallen 66-9096 over the past decade; such systems are emerging as the least expensive route to electricity in some developing countries. Already, more than 60,000 households in developing nations have installed photovoltaic lighting units. The market for photovoltaic electrification is huge: 2.1 billion people remain without electricity (8, 9). Biomass resources, which already supply 35% of developing country energy, also have enormous potential, particularly if biomass production were increased and existing agricultural and industrial wastes better utilized. If sugar mills burned all their residues using advanced 222 Envimn. Sci. Technot., Vol. 27. No. 2,1993
gas turbine technology-now being commercialized in Brazil-they would meet more than a third of the total current electricity use in developing countries (10). Some countries have taken steps on their own toward such a new energy strategy. Thailand, for example, plans to invest $183 million in electricity efficiency over the next five years and has recently levied a tax on petroleum to provide some $50 million to $60 million a year for additional investments in efficiency and renewables (11). Broad international support for such measures is needed to reach most countries. Yet, of the $67 billion that the World Bank and other development banks loaned for energy between 1980 and 1990, less than 1%was aimed at improving end-use energy efficiency. Private banks, which provide the bulk of loans, typically follow the lead of the multilateral lending institutions
Nicholas Lenssen is a research associate with t h e Worldwatch Institute and coauthor of the organizationG annual report, State of the World. He is a graduate of Dartmouth College, where he m a j o w d in g e o g r a p h y . F r o m 1984 t h r o w h 1987 he worked with the Peace Corp;in Ecuador.
References (1) United Nations Development Pro-
(2)
(3)
(4)
(12).
The World Bank staff had no plans to change direction before 1995. However, the bank‘s directors have begun to call for reform. In July 1992, they refused to approve a new policy paper until it was rewritten to encourage energy efficiency. Nevertheless, the final documentapproved in October 1992-failed to integrate energy policy with broader development goals or ensure that efficiency would receive a greater share of resources (13). Simply reducing the cost of energy services, as well as the environmental and health costs of air pollution, would allow developing countries to invest in more pressing areas. With the technologies of efficiency and renewables, and with the policies for their dissemination that have already proved effective, Brazil could shift $2 billion t o $3 billion a year out of the power sector and roughly double its funding for nutrition, preventive health care, and water and sanitation programs. Throughout the South, investments in transport and communication systems, health and education infrastructure, and water supplies and shelter could be stepped up (6). Such investments may not be feasible without the savings generated by a more efficient energy system. Indeed, an energy strategy based on efficiency and low-polluting sources is a cornerstone of the sustainable development process, and it is necessary if developing countries are to improve living standards for all of their citizens.
(5)
gramme (UNDPI. Human Development Report 1992: Oxford University Press: New York, 1992. World Economic Outlook: International Monetary Fund: Washington, DC, May 1992. Schramm, G. In AnnualReviewofEnergy 1 9 9 0 Annual Reviews: Palo Alto, CA. 1990; 307-33. Levine, M. D. et al. Energy Elficiency, Developing Nations, and Eastern Europe; report to t h e U.S. Working Group on Global Energy Efficiency: International Institute for Energy Conservation (IIEC): Washington, DC, June 1991. Levine, M. D. et al. In Annual Review of Energy a n d the Environment 1992: Annual Reviews: Palo Alto, CA. 1992:
405-35. (6) Geller. H.S.Efficient Electrici’ty Use:
A Development Strategy for Brazil; American Council for a n EnergyEfficient Economy (ACEEE): Washington, DC, 1991. (7) 1990 Energy Statistics Yearbook: United Nations: New York, 1992. 8) Flavin, C.: Lenssen. N. Beyond the Petroleum Age: Designing a Solar Economy; Worldwatch Paper 100; Worldwatch Institute: Washington. DC, December 1990. (9) Lovejoy, D. Not. Resour. Forum 1992. 16(2), 102-10. (101 Williams, R. H.; Larson, E. D. “Ad-
vanced Gasification-Based Biomass Power Generation and Cogeneration”; presented to the International Symposium on Environmentally Sound Energy Technologies and their Transfer to Developing Countries and European Economies in Transition, Milan, Italy. October 21-25, 1991. (11) d u Pont, P.; Biyaem, K. In ACEEE 1992 Summer Sfudy on Energy Efficiencyin Buildings: ACEEE Berkeley. CA, 1992:1-12. (12) Philips, M. The Least Cost Energy Path forDeveloping Countries: Energy Efficient Invesfments for the Multilateral Development Banks: IIEC: Washington, DC, 1991. (13) World Bank. Energy Development Division. “FY 91 Annual Sector Review: Energy”; Washington, DC. October 23, 1991.
This article is based on Worldwatch paper 111,Empowering Develogment: The N e w Energy Equation, pu lished In 1992 by Worldwatch Institute, 1776 Massachusetts Ave., NW,Washington. DC 20036.
