Sustainable energy has a strong linkage to poverty alleviation, better health, good education and overall quality of life. The poor are poor because they lack the access to reliable energy services. They have to rely on “dirty” fuels like kerosene for their meager energy needs.
As one goes deeper to lower economic strata of society, the percentage of expenditure on energy increases. Ironically, it is the poor who spend more on energy and that, too, on “dirty” ones.
Many of us do not relate the connection between diffusion of sustainable energy and poverty reduction. The common notion is that sustainable energy is expensive and thus to provide the poor with immediate access to energy, nuclear and coal are the only options. This is an extremely naive thought process because as solutions, they are financially and socially unsustainable.
Today, a number of policymakers and governments are contemplating “larger” solutions to solve the problem of energy poverty. Many in the developing and the developed world defend coal, oil and nuclear energy strategies by citing that there are more than 1.5 billion people without electricity.
Let me dig deeper here. Most expansions in the power sector will go toward providing energy to industries and urban centers, and that, too, in a very inefficient manner.
Yet, while I agree that development through industries needs to take place, the solutions when it comes to the poorer populations of our world are not pragmatic. Providing basic services like lighting and clean cooking have their challenges and cannot be solved by centralized options like coal, oil or nuclear, as the barriers are very different.
The next generation of sustainable business models and enterprises, innovations for need-based technological interventions, and social changes in behavior will come from the 3+ billion poor people living across the continents of Asia, Africa and Latin America. It would be a huge folly to replicate solutions of the existing haves onto the have-nots. The world has a wonderful opportunity to address poverty reduction and provide climate change solutions by creating sustainable processes for the present 3+ billion have-nots.
There are proven sustainable models and processes that link sustainable energy solutions to poverty alleviation. But they have been lost in the larger picture because multilaterals, governments and policymakers don’t seem to understand the challenge at the grass roots. That needs to change if we want to tackle poverty in a more systematic way. Innovations and business models involving decentralized sustainable energies like solar, biomass, biogas and small wind provide effective solutions.
To alleviate poverty, we all know that incomes need to increase. For this, income-generating activities must be created in underserved regions of the world, making access to reliable energy integral to the process.
Contrary to popular economics and policies, it is not advisable to wait for centralized energy solutions to provide that particular economic impetus. Inefficiencies, hidden subsidies, poor implementation and lack of transparency have never been properly factored in when comparing centralized versus decentralized energy options. One also needs to factor in the loss to the world’s well-being that is the result of not providing, or delaying, access to reliable energy to the poor.
The result is very evident: Large numbers of people in developing and underdeveloped countries have remained poor with no avenues to increase their income and quality of life. The cost of delaying the solutions of poverty alleviation, although enormous, is often neglected. Skilled seamstresses cannot upgrade their manual sewing machines to electric machines; trained poor welders do not have the option of opening welding shops; silk weavers lament the unavailability of reliable electricity; inefficient machines produce higher electricity bills that eat into incomes … The list goes on.
Decentralized energy solutions can be provided, today, at their doorstep, provided holistic solutions are developed. Sustainable solutions can be provided if the value of technology, finance and market linkages are spoken about in the same breath.
Small interventions like solar lighting solutions to replace kerosene lamps for village vendors, or efficient sky lighting for households in the slums, can lead the poor away from expensive present-day options, thus leading to savings, increased number of healthy working hours, and so on. These are just a few examples of the thousands of simple, small interventions using sustainable energy that can directly lead to better quality of life and increased incomes for the poor. Many of these solutions and interventions can be used across borders.
A number of solutions and models of business, for the problems mentioned above, already exist in some of the more advanced developing countries like India. They need to be scaled up and replicated. If local governments are to effectively provide sustainable energy services, access to technology and finance would be vital. However, a number of developed governments that do have access to needed technology have not taken the initiative to share it. This needs to change.
The poor are not a monolithic structure. Many of the successful models cannot be replicated in total. But most processes of these successful models can be replicated with certain variations depending on culture, financial behavior et cetera. Before we jump into the replication of processes or models, the ecosystems in various developing countries need to be in place. By ecosystem, I refer to the creation of local financial instruments and institutions, basic skilled human resources, channels to stimulate market linkages and a platform for local entrepreneurs to bloom. These are all necessary for bottom-up solutions to be implementable.
Donors, multilaterals and bilateral agencies should focus on the creation of this very ecosystem and not concentrate merely on the diffusion of technology or models — that can be done by local enterprises or entrepreneurs once the ecosystem is created. The cost of developing the ecosystem is enormous and beyond the means of local enterprises, and in some cases of local governments as well. This is where the external world, in the form of corporations, international donors and multilateral agencies, can step in and catalyze productive change.
The eradication of poverty leads to a healthier society with a stable social structure, an important element in today’s world — and sustainable energy is a very critical catalyst.
Tell us what you think! Comment below or tweet to @devex with #RioPlusSolutions, and catch up on other Rio+Solutions content here or on Facebook.
Harish Hande co-founded Selco India to eradicate poverty by promoting sustainable technologies in rural India. Since 1995, Selco has built a service network of 28 branches in Karnataka and Gujarat, with 180 employees catering to more than 500,000 customers in rural and urban areas. Harish has received several awards and recognitions for his work, including Asia's prestigious Ramon Magsaysay Award, sometimes referred to as Asia's Nobel Prize, for his pragmatic efforts to put solar power technology in the hands of the poor through social enterprise. Harish holds an undergraduate engineering degree from IIT Kharagpur and a Ph.D. in energy engineering from the University of Massachusetts Lowell.