When you got up this morning you probably switched on the light, went into the kitchen and popped something into the microwave or onto the stove. But, have you ever stopped to think that what you would do if you didn’t have electricity or gas? For 40% of the world’s population, their day started at sunrise, going out to find wood or dung which they would use to start a fire to cook their first meal.
Searching for cooking fuel, collecting water and cooking meals, can take up to 10 hours in a day for many. A job usually delegated to women and girls, it leaves little time to go to school or take on paid work. Women and children are also adversely affected by the smoke produced while cooking in these situations. Smoke kills about 1.6 million people each year worldwide and leads to high incidence of lung disease.
Lack of energy, be it electricity or fuel, has a direct impact on development and is one of the main drivers of cyclical poverty. Of the 1.5 billion without access to electricity, 670 million are in 48 countries that make up the lesser developed countries (LDCs) as defined by the United Nations. Energy alone cannot raise people out of poverty but can decrease the amount of time taken up by daily activities that can now instead be directed towards income generating activities.
Conversely, without energy, Millennium Development Goals on education, health and women empowerment could not be achieved. With the day predominately taken up with household activities, electricity allows the day to be extended past sundown enabling women to take up income generating activities and children to spend more time on their studies.
It is for this reason that the UN has set a goal of universal energy access by 2030. Part of the Sustainable Energy for All initiative it is one of three energy goals applicable to both developed and developing countries. Other goals centre on doubling the proportion of renewable in the global energy mix and improving energy efficiency globally by 50%.
However, meeting a goal of universal energy access will be a challenge. The overwhelming majority of people without access are living in rural and remote areas. Extending grid and pipe lines to these areas is capital-intensive and often people don’t have the money to pay for connection costs or the ability to make monthly energy payments. It is estimated it will require 756 Billion USD to achieve universal access and in these difficult economic times the private sector is being looked upon to play a large role.
They not only provide direct investment but also supply the technological ingenuity and off grid/decentralised energy solutions that are market ready and meet the needs of those in rural and remote areas. Eight19 (which has developed IndiGo pay as you go solar lightening for Kenyans) is a good example of a company that has use mobile technology to increase energy access. However, their ability to scale up and expand into other countries was limited without private investment from financial institutions and the equity market.
Oil and gas companies control 75% of energy resources produced in Sub- Saharan Africa exporting 40% of resources out of the continent. However, in light of the fact that half of the top 10 largest oil and gas producers are LDCs and only three have more than 50% of their population with access to electricity, it is clear that transparency and better governance will also need to play a role.
If David Cameron is serious about improving the lives of women and eliminating absolute poverty then he should focus attention on improving energy access. With an eye on profit making, many companies will only market their services to those who can pay. This is clearly indicated by the wide urban/rural divide in energy access. Developing countries will need assistance in accessing and developing suitable renewable energy technologies as well as creating local market conditions, particularly income generating activities, which would allow people to afford the services and make them sustainable.
For a continent to be so rich in energy resources and its people so energy poor reveals the distorted relationship between energy companies and developing countries. Due to the overwhelming need for private investment in developing countries, energy companies can often dictate the terms of agreement for resource extraction and threaten to leave over country reforms on industry regulation and tax reforms. Developing countries need capacity building in financial monitoring of foreign companies, strengthening their own tax systems and fighting corruption. Greater transparency is also needed on profit and taxes through such initiatives as the Dodd Franks Act and the EU Transparency and Accounting Directive. Many energy companies are challenging the Dodd Franks Act in US courts while rushing to meetings of the voluntary Extractive Industries Transparency Initiative. Voluntary agreements are clearly not sufficient and transparency therefore needs to be legislated for in the UK and elsewhere.
Margaret Araujo is a member of the Labour Campaign for International Development