Every year, development agencies like the World Bank invest billions of dollars in energy projects. In June 2013, the Bank made a decision to restrict financing of coal-fired power plants to “rare” circumstances. The idea of this decision was to emphasize the Bank’s commitment to mitigating climate change. In the United States, the Overseas Private Investment Corporation restricts funding on all fossil fuels.
Since I’m an environmentalist, my gut reaction would be to cheer for these decisions, as they represent small steps toward a more sustainable world. However, I’m not sure these restrictions are cost-effective or ethical. The world’s poor consume little electricity, with the typical fridge in the United States consuming more per year than 9 Ethiopians.
In such a context, it strikes me as hypocritical and ineffective to raise barriers to electricity access for the poor of this world. We should, instead, focus our efforts on reducing the overconsumption of fossil fuels among the wealthy.
One could counter me by saying that renewable energy is now a realistic alternative and we no longer need fossil fuels. Indeed, that’s what organizations like the Sierra Club are saying. They believe renewables — especially solar — provide the best way forward for eradicating energy poverty.
My own experience, largely based on fieldwork in India and Tanzania, is that it’s more complicated than that. In some developing country settings, renewable energy is now the best source of power for the grid. In others, it is not. Off-grid renewables have made some progress in providing lighting and mobile charging for people, but they’re far from being able to provide modern energy services to billions at an affordable cost. We need to support renewables to tap into their potential, but we should not set unrealistic goals or forgo excellent opportunities to eradicate poverty by using fossil fuels.
In a complex world, blanket bans on fossil fuels are not a good idea. We absolutely need environmental and social safeguards on energy projects, as they can cause a lot of damage, but we should analyze these projects on a case-by-case basis. Providing the world’s poor with electricity should be a top priority for us, and sometimes natural gas — or even coal — is the best solution. If a power plant can provide badly needed electricity for millions and does not have a noticeable effect on global carbon emissions, it should be built.
This position may be unpopular among my fellow environmentalists, but I am by now convinced that it is the ethical one. There’s a huge difference between campaigning for measures to reduce or decarbonize energy consumption among the global wealthy and among the poor. The wealthy must lead efforts to mitigate climate change.
I’m planning to write a follow-up post on this to clarify my position on when we should make decarbonization a top priority in energy projects, but that’s for another day — now I need to go back to work to reduce energy poverty in India through solar power.