Clean Energy Initiatives: A Winning Situation For All

During the Copenhagen Climate Change Conference last week, a global 10 billion US dollar annual fund was proposed to assist developing countries in averting their carbon emissions prior to when the new treaty comes into effect in 2012. Critics claim that this proposal is insufficient and one proposal put forward involves shifting some of the International Monetary Fund’s investments into financing clean-energy projects in the developing world.

In the developing world, agriculture is a primary economic activity, accounting for about 30 percent of their GDP. Lack of access to adequate, affordable, and convenient sources of energy is one of the key challenges faced daily by rural inhabitants. Worldwide, 2.4 billion people rely on biomass for cooking and heating while another 1.6 billion have no access to electricity whatsoever. The UN reports that such an energy gap "entrenches poverty…and erodes environmental sustainability at the local, national and global levels."

It is undeniable that access to clean, reliable, and affordable energy is critical to sustainable development. Research indicates that sustainable energy technologies and programs can directly contribute to development as they offer an income source, improve health, air and water quality, and provide amenities such as heat and light.

In particular, renewable energy can be beneficial for developing countries. In rural areas transmission and distribution of energy generated from fossil fuels can be complicated and costly. Producing renewable energy locally can reduce such a financial burden.

There is increasing awareness that conventional, ‘top-down’ development approaches have failed to deliver results that satisfy the needs of the developing world. An alternative to top-down development approaches is provided by initiatives that aim at increasing local participation. This ‘bottom-up’ approach has been adopted by organizations such as Wisions, and Grameen Shakti who acknowledge that local participation allows projects to better reflect local needs rather than sole instruction from the professionals who are working with them.

The Ashden Awards for Sustainable Energy is an organization that awards and brings to light inspiring sustainable energy solutions in the UK and the developing world and helps to ensure that these solutions are promoted more widely. Grameen Shakti, a non-profit organization in Bangladesh, was a recipient of the award in 2006. The organization’s goal involves “rescuing rural poor from energy poverty which undermines their social and economic development” by empowering rural people through access to environmentally friendly and sustainable energy at affordable costs, while providing them with income-generating activities, and access to a better quality of life. Grameen Shakti is involved in a range of activities related to small-scale photovoltaic (PV) systems, including: marketing, sales, servicing, training, research and development, credit provision, payment collection, and credit guarantees.

Through small micro-credit loans, self-employment is provided to the country’s rural families. Buyers of PV systems have reported increases in income and productivity by extending working hours after dusk and due to the introduction of computers powered by PV. Grameen Shakti is training technicians in PV installation and maintenance, thereby creating employment for local people, facilitating technological transfers, and developing skilled technicians in rural areas. Funding for the micro-credit system comes from the World Bank and Global Environment Facility via the Infrastructure Development Company Limited (IDCOL).

Energy is central to economic development: there is a clear correlation between energy consumption and living standards. And, microfinance is one solution that can meet large and small scale needs. Unlike commercial loans, no collateral is required for a micro-loan and it is usually repaid within six months to a year. Those funds are then recycled as other loans, keeping money working and in the hands of borrowers. Government investments into renewable energy projects in the developing world will also benefit the global economy. The EU's Project Catalyst estimates such global investment will generate about $100 billion by 2020. It is evident that clean energy initiatives world yield financial and social benefits to citizens and businesses alike.