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Energy Access as a Driving Force for Poverty Eradication

Energy Access as a Driving Force for Poverty Eradication

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By Ejiro Gray

Background

The Sustainable Development Goals (SDGs) are a series of seventeen pressure points across global issues which threaten the sustained, inclusive and sustainable economic growth of the nations of the earth, if not addressed. The seventeen goals which aim for a 15-year mark for achievement, took off in 2015, with a 2030 destination timeline. These are no doubt aggressive goals that cut across everyday life and existence, and therefore require the full cooperation of all, if they are to be attained, and no less within the agreed timeline of 2030. Over time, we will take a closer look at these goals and their relationship with the climate change and energy transition agenda, starting with SDG -1: “No Poverty”.

Poverty

 As of 2021, an estimated 698 million people, or 9% of the global population, were living in extreme poverty – that is, living on less than $1.90 a day[1]. Today, fully immersed into the decade of implementation of the SDGs, there remains an estimated eight million more people living in poverty than there were in 2019[2]. Due to the ravages of the COVID-19 pandemic and consequent economic downturn, this growing statistic threatens to undo much of the progress made in the preceding years.

The varying speed of economic recovery efforts of different countries as the pandemic becomes better managed, coupled with the impact of socio-political outlook of certain regions, have seen the likes of China and India experiencing the most significant abatement in people living in extreme poverty between 2020 and 2021. On the flipside, there has been an increase in the number of people living in extreme poverty in sub-Saharan Africa, with an undesirable statistic of up to 66% of the global population living in extreme poverty today, found in sub-Saharan Africa.  Fiscal pressure resulting from conflict and political fragility through disruptions to trade and supply chains, have also brought about an increase in poverty for affected countries, with some of the worst hit being in Africa, and now extending to the likes of Syria, Afghanistan, and more recently, Ukraine. Unfortunately, this comes with ripple effects on developing countries and other Net Importer countries, with a potential trigger for debt crisis in already pressured and disadvantaged economies.

Climate Change

 The Last Decade Was the Hottest in 125,000 Years[3]. Human influence has warmed the atmosphere, ocean and land[4]. With certainty, we can now attribute natural disasters to human-driven climate change.[5] It was recently found that air pollution kills more than 9 million people per year[6], with regions such as South-East Asia and Africa being the most impacted. Energy Transition is driven by the need to reduce energy related CO2 emissions to reduce the impact of human and industrial activity on the environment. Decarbonization of all sectors, and no less.

the energy sector, is critical to achieving the climate change agenda. Nevertheless, there are grey areas in the issue of sustainability and a purist approach to energy transition will neither fast-track nor achieve the desired objective.

Extreme Poverty Vs Climate Change. A Battle for Supremacy?

In a world still in recovery from the damaging effects of a pandemic and global uncertainty arising from a war with a largely unpredictable outcome, it is almost inevitable for the poverty eradication aspirations and climate change agenda to be at variance. For developing countries, the situation appears even more despondent.

In much of Africa, poverty aggravated by decades of bad governance, conflict, and underdevelopment, make it difficult to allocate scarce resources to climate alleviation solutions, in the face of preservation of human life from extreme poverty, which is seemingly a more pressing issue. But the impact of natural disasters on the very lives we strive to preserve, coupled with the pressure on the natural capital we remain dependent on, means that climate change and its impact cannot be ignored. Nonetheless, we must acknowledge the peculiar situation in which we find ourselves to navigate our way out of the quagmire.

Socio-Economic Poverty and Energy Poverty go hand in hand, and in the face of struggle, human survival instincts will sadly trump concern for the sustainability of the planet.  From deforestation through wood burning as a cooking fuel, and the attendant health challenges it presents, to over-leveraged utility companies unable to attract the much-needed funding required for expansion and electrification projects, as well as the rising cost of fossil fuel production and distribution in mono-product economies. The battle for supremacy of challenges in developing countries is mounting to epic proportions, in the face of limited financial aid and untapped resources, due to low project bankability.

Energy Access – The Driving Force

The growth of any developing economy is hinged on how enabling the fiscal and socio-economic landscape is for Small & Medium Enterprises (SMEs) to thrive. This is because SMEs are pivotal to economic empowerment, stimulating the growth of industries for which energy access is a critical driver and a necessary tool for poverty eradication. The proliferation of Industries naturally promotes development and urbanization and in tandem, a higher standard of living buoyed by an enhanced GDP.

The peculiar plight of developing countries, many of which are grappling with poverty must therefore be addressed if we are to make any significant progress with the energy transition process and consequently climate change mitigation. There is a gap that needs to be closed; a game of catch up to be played, to gain traction in the move from ‘unavailable – unaffordable’ energy, to ‘clean – available – affordable’ energy. This will be best achieved when we are able to draw a clear line of sight from energy access to poverty alleviation and eradication. The latter cannot be achieved sustainably without the former. As such, addressing the energy transition and SDG –1 agenda for developing countries with relatively low energy access and high poverty statistics, must be treated as a holistic energy access strategy.  A strategy that is hinged on ambidexterity – maximizing the present through the efficient use of the prolific natural resources whilst planning and protecting the future responsibly. Otherwise, as South Africa’s Energy Minister – Mr. Gwede Mantashe once said [paraphrased], ‘we may find ourselves breathing fresh air in darkness’, and might I add, on empty stomachs.

 Driving the Vehicle of Cooperation

Events of the last three years have taught us that climate change policies need to be developed with a contingency plan and risk mitigation strategies. The pandemic and more recently the Russia/Ukraine crisis have demonstrated the exposure and vulnerability of the world and indeed the climate change agenda, to political and economic risk. The best energy transition pathways for developing countries must support the country’s development needs and the attainment of the SDGs, with an understanding of the sensitivity of economic planning, to external forces beyond its control.

For the private sector, in developing countries, the perception of Sustainability must change from an activity-based model that companies wish to be seen to be involved in, which in turn enables them to maintain their social licence to operate. Sustainability must now be understood to be the driving force behind innovation and continuous evolution in business if we are to achieve development aspirations. Synergy must be the driver of the vehicle called cooperation, to mobilize resources and capabilities for project bankability, a necessity for the actualization of development projects. Sustainability, therefore, is a matter of survival for all, that needs to be addressed with urgency. In other words, “Go Big, or Go Home”. This approach will promote cross-sectorial collaboration in economic development and technological advancement for the ultimate benefit of organizations, the economy, and the society.

 In closing, the picture of success for energy transition of developing countries vis-à-vis the fight for poverty eradication will be one involving multidimensional collaboration of private sector, the investing community, funding agencies, development institutions and the Government, to drive energy access as a tool for economic empowerment, a driving force for poverty eradication and consequently, a catalyst for energy transition.

Sources:

[1] https://devinit.org/documents/1100/Poverty_trends_-_global_regional_and_national_-_November_2021.pdf

[2] https://devinit.org/documents/1100/Poverty_trends (n 1)

[3] https://earth.org/data_visualization/11-interesting-facts-about-climate-change/

[4] https://www.ipcc.ch/2021/08/09/ar6-wg1-20210809-pr/

[5] https://earth.org/data_visualization/ (n 3)

[6] https://earth.org/data_visualization/ (n 3, n 5)

 

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