Energy Access Without Development

This week, the Brookings Institution’s Energy Security and Climate Initiative hosted a debate between myself and UC Berkeley’s Dan Kammen. The important relationship between energy consumption and human well-being is today broadly recognized by scholars and policy-makers. But there is no similar consensus as to the ways in which energy drives human development, what types of technology and investment are most productive, and how growth in energy consumption interacts with other key driver of development such as urbanization and industrialization.

Below are my remarks from the event. In the coming months, Breakthrough will be releasing more research on the role energy plays in human development.

In recent years, a growing cohort of scholars, journalists, and policy-makers have recognized the connection between energy consumption and human well-being. As a general rule, societies that consume more energy score better on most measures of human development, including life expectancy, health outcomes, educational attainment, and economic security.

As a result, efforts to alleviate poverty have increasingly focused on improving access to electricity and modern cooking, heating, and transportation fuels. In 2010, the United Nations declared 2012 the Year of Sustainable Energy for All, with the goal of ensuring universal access to modern energy services. In 2013, the Obama Administration launched the Power Africa initiative with the goal of doubling access to power in sub-Saharan Africa.

Unfortunately, these efforts too often conflate access to modern sources of energy with consumption of modern energy. It is the latter, not the former, that is strongly correlated with better human development outcomes. The International Energy Agency defines energy access as consuming 100 kWh of electricity per year, about enough to power a single lightbulb. The United Nations Sustainable Energy for All initiative doesn’t explicitly call out a specific threshold, but the four key technological pathways identified by the initiative give some sense of the scale of its ambitions: clean cookstoves, biomass-based mini- and micro-grids, decentralized solar generation technologies, and energy efficient solar lanterns and lighting.

Consistent with that focus, other international aid groups, governments, and multilateral development agencies have distributed tens of millions of clean cook stoves to reduce the smoke from fires and make wood and dung burn more efficiently. Millions more solar lanterns have been donated or sold to the energy poor as a replacement for candles and kerosene lamps.

Now there is nothing per se wrong with these efforts. But the question we are raising in our work is, what exactly can we realistically expect from them? Is this an exercise in charity, trying to make deep agrarian poverty a bit more bearable? Or is it an exercise in economic development, focused on creating development pathways that can move large numbers of people out of agrarian poverty? Can economic development and growth proceed without very dramatically raising the amount of energy consumed, an order of magnitude or more beyond the threshold that IEA defines as constituting access? Can higher energy consumption, consistent with modern life expectancies, health outcomes, educational attainment, and social and economic mobility be achieved without moving most of a nation’s population out of the agricultural sector and rural social and economic arrangements? And can small scale interventions at the household level, cookstoves, mini-grids, and solar lanterns support economic enterprise at the scales necessary to expand off-farm economic activity and raise incomes sufficiently that large populations are able to consume energy, or energy services if you will, at levels that are recognizably modern?

Our conclusion is that there are no large-scale precedents for what is being proposed at UNSE4All and elsewhere. My interest is not to pick on the United Nations. The idea that these efforts can lead to something approaching modern levels of energy consumption is widely held and, at best, ahistorical.

More broadly, the track record of these kinds of micro-interventions is not good. Whether one looks at micro-credit programs such as those initiated by Mohammed Yunis and the Grameen Bank, or Jeffery Sachs Millenium Villages, or major efforts to distribute clean cook stoves and solar lanterns, none of these initiatives have demonstrated much success at moving large populations out of poverty. Again, they have helped some individuals and families improve their lives to varying degrees. But that is different than achieving broad human or economic development objectives.

So what does work? Having spent a number of years looking at how nations around the world have achieved universal access to modern levels of energy consumption, I can tell you that there are number of consistent features in just about every nation that has succeeded.

The first is that no nation has achieved universal access to electricity and modern fuel without moving most of their population out of agriculture and into cities. Subsistence farmers can’t pay for electricity and can’t afford appliances to convert electricity into useful energy services. Universal access to modern energy services requires very major growth in off-farm employment and incomes.

Second, household electrification has generally proceeded as a side benefit of energy development for large scale economic enterprise and infrastructure. Even in the United States, the provision of electricity from Pearl Street Station to wealthy households was a sideshow. The first widespread applications of electricity were for trolleys and factories. With large loads and initial generation and transmission facilities in place, the cost of extending connections to households was relatively low.

Third, most people throughout history have gotten access to electricity by moving to the city, not by having electricity connections come to them in the country. Rural electrification, where it has occurred, has occurred as the last step toward universal electrification, after most people have achieved access in cities.

Fourth, there is no substitute for functioning public institutions. That doesn’t mean that there can be no tolerance for corruption or inefficiency. Energy infrastructure development has proceeded under a variety of institutional circumstances and with more or less transparency to reasonably good effect. But there is no shortcut for basic infrastructure development and governance.

The past, of course, is only prologue. But as we consider contemporary efforts to end energy poverty, there are a number of lessons from that historical record that we might apply today:

1. Prioritize energy development for productive economic enterprise, industry, mining, agriculture and manufacturing.

2. Focus on extending grid access in cities. Huge populations already live in close proximity to electrical grids and centralized generation capacity. We are currently undergoing the most rapid rates of urbanization in human history. The best way to increase energy consumption for the energy poor is to work with those trends, not against them.

3. Where energy access programs do target rural communities, target applications that raise agricultural productivity and on-farm incomes.

4. Plan for the future as well as the present. Developing world economies are evolving rapidly. Investments in energy technology, particularly off-grid technologies, need to anticipate continuing energy development, infrastructure, and integration.