The Road More Traveled
The problem of energy poverty is widely acknowledged. Approximately one billion people have little to no access to electricity, and many more lack the financial means to consume electricity at levels that might support a standard of living that is within sight of developed countries. Mere access to electricity is not enough. The ability to consume substantial levels of electricity is generally agreed to be a precondition for achieving modern living standards. Populations suffering from energy poverty remain trapped in an economy in which wood and other basic forms of bioenergy are often the primary source of fuel. Poverty is endemic, labor is menial, off-farm employment is rare, educational opportunities are limited, social mobility is nil, and subsistence needs are often in jeopardy.
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To support countries that have yet to attain meaningful, country-wide electrification, we should look to history for lessons on how it was achieved. Extracting useful lessons from history is what motivates the case study research reported here. We examine five examples of successful universal electrification, at the culmination of which a large percentage of the national population was able to consume electricity at levels that are correlated with a high standard of living. While these case studies may not encompass every successful model, the countries we examine — the United States, Mexico, Brazil, Thailand, and China — were selected to cover a range of historical periods, geographies, economic circumstances, and institutional arrangements.
To be clear, in all of these countries, some small portion of the population remains without electricity access and some larger portion suffers unreliable access or levels of poverty that prevent them from consuming an amount of electricity consonant with a modern lifestyle. What we measure in these case studies — universal electrification — is not an end to poverty, inequality, corruption, or technical failure. Rather, what these countries have achieved is at least something extremely close to universal access to electricity combined with the ability of generators to provide, and most people to consume, large amounts of electricity. By this standard, these five countries merited inclusion in our case studies.
These case studies serve not just to detail the history of what actually happened on the road to universal electrification, but also how it happened — a research question to which case study methods are well suited. Because our case study countries include historical periods of both success and failure in pursuit of electrification, our sample serves as its own “control group,” allowing us to develop and iteratively test and confirm hypotheses.
Across case studies, our central finding is that meaningful universal electrification occurred as part of a broad process of economic development and modernization, driven by a virtuous cycle of energy consumption, urbanization, industrialization, and agricultural modernization.
While we find a range of country-specific contexts, institutions, and technological pathways, this research suggests that in its broad dimensions, the virtuous cycle described above is not just historically incidental to the five countries considered here, but rather elemental to successful efforts to achieve universal electrification. The processes fundamental to economic modernization — urbanization, industrialization, and agricultural modernization — do not just appear consistently across the histories we examine, but rather cannot be separated from the process of extending electricity to large populations. Urbanization, industrialization, and agricultural modernization require electricity, and the consumption of electricity at levels necessary to support modern living standards requires substantial increases in labor productivity (and hence wages) that are only possible with economic modernization.
Meaningful universal electrification, in other words, cannot be achieved, or understood, in isolation.
Further, we find that universal electrification requires deliberate and sustained efforts by governments. Initially, governments are instrumental in creating the integration necessary for an efficient, integrated grid. In all case study countries except China, private firms also played a large role in bolstering initial growth in the electricity sector, which governments later capitalized on.
Government policies to comprehensively fund, regulate, and coordinate electrification cannot be readily replaced with piecemeal, private alternatives.
Nowhere does government play a more prominent role than in overcoming the challenges inherent in achieving rural electrification. Rural electrification is expensive and lacks a near-term financial incentive, making it an unattractive investment for private entities. This is not to say that the national government’s role in rural electrification must be highly centralized. To the contrary, successful government initiatives in our case study countries often empowered local municipalities politically and financially to pursue rural electrification.
Importantly, we also find that countries are most successful in achieving meaningful electrification of rural areas only after significant urbanization and agricultural modernization is under way, and when they aim to increase consumption of electricity, not merely access. This is especially true when efforts promote electricity consumption that is income-generating and productivity-enhancing.
This research has a number of implications for efforts to address energy poverty. First, government policies to comprehensively fund, regulate, and coordinate electrification cannot be readily replaced with piecemeal, private alternatives. Second, efforts should seek to increase consumption of electricity, not just access, and the emphasis should be put on promoting income-generating and productivity-enhancing electricity consumption — since it is this kind of electricity consumption that both improves quality of life and contributes to the virtuous cycle of socioeconomic development.
Moreover, to the extent that new electrification solutions have become available — small-scale solar panels and batteries, mini- and microgrids, pay-go and other innovative business models, and the like — they must be compatible with, not an alternative to, the conventional path to universal electrification. And finally, because signs point to a future that is increasingly urban and post-agrarian, technologies, policies, and pathways that do not scale with these eventualities should not be considered viable.
Finally, our findings entail that we should regard with skepticism calls for “alternative pathways” and “leapfrogging” in the energy systems of developing countries, proposals that are tantamount to the notion that meaningful universal electrification can be realistically achieved without the virtuous cycle of modernization and its self-reinforcing momentum. While it may be possible to bypass high-pollution and high-carbon energy in some cases, the fundamentals of modernization, by every indication, cannot be bypassed. Instead, the goal should be to support developing countries in progressing — as rapidly as possible, while minimizing environmental impact — along the “road more traveled.”