Approaching global crisis threatens to reverse human development

Jun 22, 2004 02:00 AM

An award winning think tanks has exposed the violence, corruption and climate change that is fostered by the global oil economy, and the potential contrast that renewables could bring, particularly to developing countries.
The nef (new economics foundation) claims in its latest report that a fast approaching global energy and climate crisis threatens to reverse human development.

“The Price of Power”, says that even a small shift of support away from fossil fuels toward clean renewable energy could save millions of lives and help avert global warming. The report shows how "business as usual" development strategies that continue to plan to meet expanding energy needs with fossil fuels are self-defeating and doomed to failure. The costs of “natural” disasters mostly linked to global warming hit $ 60 bn in 2003, of which $ 15 bn were insured.
The report shows that renewable energy has the potential to more than meet growing global energy demands. Currently renewables account for around 13 %of global energy supplies but there is technical potential to increase that by around 120 times. Yet a shift to renewables depends on removing distorting subsidies on fossil fuels and proper investment in clean energy.

The report highlights the possibilities of using renewable energy:
-- At the moment, only one to 3 % out of the $ 40 bn spent annually on energy investment in developing countries goes towards renewables.
-- Indoor pollution accounts for 2.2 mm deaths and costs the world between $ 150 bn and $ 750 bn per year -- 0.5 to 2.5 % of the world’s GNP -- mainly in lost production through sickness and death. But by spending just 5 % of their total annual overseas aid budget on clean-technology stoves for poor households, OECD nations could help save over 25 mm lives over the next decade.
-- All of non-electrified Sub-Saharan Africa could be provided with energy from small-scale solar facilities for less than 70 % of what the wealthy OECD countries spend on subsidising dirty energy every year.
-- One year’s worth of World-Bank spending on fossil fuel projects, if redirected to small-scale solar installations in Sub-Saharan Africa, could provide 10 mm people on the continent with electricity. And, the annual amount tied to investments in coal, oil and gas projects in the developing world between 1992 and 2002 by US agencies could have provided over 30 mm people in Sub Saharan Africa each year with solar electricity.
-- One year’s worth of global fossil fuel subsidies could comfortably pay off Sub-Saharan Africa’s entire international debt burden with billions left over.

NEF claim that under business as usual, global oil use and economic growth are interdependent. Threats to oil supply, either in terms of price or simple availability, mean the global economy going “cold turkey”. Once oil production peaks -- a point many analysts believe we are on the cusp of -- prices begin to rise sharply, with the heaviest burden falling on the poorest countries, while developed nations are alreadyexperiencing fuel price riots
The report shows that subsidies to coal, oil and gas, measured conservatively at around $ 235 bn per year directly distort the global economy and hold back the development of renewables. The energy industry is further skewed by the fact that the direct costs of damage by carbon emission -- estimated by the British government at between £ 50 and £ 200 per ton -- are not factored into the price of fossil fuels.

Andrew Simms, nef Policy Director said, "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."
The capital requirements of renewables can also be lower than those of conventional and centralized investments.

The report highlights the diversity, flexibility and potential of renewable energy sources, including:
-- 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 % on energy bills.
-- In Mongolia, small household-scale wind turbines have added up to $ 30-$ 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 the official adoption of key targets for the uptake of renewable energy including:
-- Implement the G8’s target of serving at least 1 bn people globally with renewable energy by 2010, phase out government subsidies for fossil fuels and nuclear energy.
-- Reform the International Financial Institutions and Export Credit Agencies to dramatically increase funding for renewable energies in developing countries. Phase out World Bank Group subsidies to fossil fuel projects by 2008 in line with the recommendations of its Extractive Industries Review.
-- Increase the target of access to clean energy to 2 bn on the world’s poorest people over the next ten years.

nef is an independent think tank that aims to improve quality of life by promoting innovative solutions that challenge mainstream thinking on economic, environment and social issues. nef was founded in 1986 by the leaders of The Other Economic Summit (TOES) which forced issues such as international debt onto the agenda of the G7 and G8 summits.
This report is published in association with the Ashden Trust. The Ashden Awards for Sustainable Energy highlight and reward outstanding renewable energy projects in the developing world and the UK.

Source: Environment Times
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