Energy poverty: The missing Millennium Development Goal?

Over 1.4 billion people around the world do not have access to electricity, according to IEA analysis

Following the UN General Assembly’s recent announcement that 2012 will be the 'International Year of Sustainable Energy for All’, the International Energy Agency’s Chief Economist has called for urgent action to be taken to secure adequate funding so that universal energy access can be achieved.

“Today, almost one fifth of the world’s inhabitants do not have access to electricity. This is completely unacceptable and must not go on,” said Dr. Fatih Birol.

“A family with no electricity access suffers severe and life-changing disadvantages every day. Children being unable to do their homework once it gets dark and those who are unwell not being able to keep medicines because they don’t have a fridge are just two of many major obstacles,” he added.

Over the last few years, international momentum has been building on the issue of access to energy. High global energy and food prices have brought greater international focus on the impact on both the global economy and the world’s poor. In addition to the UN General Assembly adopting ‘Sustainable Energy for All’ as next year’s theme, the UN Advisory Group on Energy and Climate Change has called for the adoption of a goal of universal access to modern energy services by 2030.

“I welcome these moves by the UN to draw attention to, and focus on ensuring access to energy for all. These moves show positive progress despite the decision not to include energy in the Millennium Development Goals back in 2000. Action is needed now in order to translate the goal of universal access to modern energy into tangible progress supported by adequate financing,” stressed Dr. Birol.

No electricity for one fifth of world’s population

According to IEA analysis, there are currently 1.4 billion people – over 20% of the world’s population – who lack access to electricity. Five hundred and eighty-five million are based in Sub-Saharan Africa, including over 76 million in Nigeria and 69 million in Ethiopia. Most of the remaining people live in Asia, including 400 million in India and 96 million in Bangladesh.

If governments only implement broad policy commitments in this area that they have already announced, the IEA projects that this problem will persist in the long term. Research in the World Energy Outlook 2010 – which is the IEA’s flagship publication – shows that 1.2 billion people will still lack access to electricity in 2030, 87% of them living in rural areas.

“This is an alarming picture of what the future might look like, and one which the global community must work together to counter,” Dr. Birol argued.

In order to bring modern energy services to these 1.2 billion people who will not have access to electricity if government policies remain as they are now, the IEA has calculated that additional cumulative investment of USD 700 billion in 2010 to 2030 is required. That breaks down to USD 33 billion per year.

Effect on the environment

One criticism levied against universal access to electricity is that it would lead to a dramatic increase in greenhouse gas emissions.

“This is simply not true,” the IEA’s Chief Economist argued, adding that “the increase in CO2 emissions would actually be less than 1%.”

Dr. Birol stressed that the impact of access to modern energy services cannot be underestimated, and that it will have a significant effect on tackling poverty.

Use of traditional biomass

As well as access to electricity, the World Energy Outlook also highlights the extensive reliance on traditional use of biomass for cooking as the other major dimension of energy poverty.

The number of people who use traditional biomass, such as wood and manure, is projected to rise from 2.7 billion today, to 2.8 billion in 2030.

According to estimates from the World Health Organization (WHO) and IEA projections, it is estimated that household air pollution from the use of these traditional sources of biomass in stoves with inadequate ventilation would lead to over 1.5 million premature deaths per year in 2030.

While the number of deaths due to the effects of breathing smoke from these traditional biomass fuels is set to rise in the next two decades, by contrast, the WHO expects the number of premature deaths from malaria, tuberculosis or HIV/AIDS to decline over the same period.

In order to combat this problem, and achieve universal access to clean cooking facilities for some 2.8 billion people, IEA analysis found that additional cumulative investment of some USD 56 billion would be required in the next 20 years, or USD 2.6 billion every year.

By combining this figure, with the sum needed to achieve universal access to electricity, the total investment needed between now and 2030 is USD 756 billion.

“While at first glance this seems to be an impossible sum to raise, it actually works out at just 3% of the projected global energy investment of over USD 26 trillion that will be spent between 2010 and 2030,” Dr Birol explained.

Global community must rally together

“Although there is now greater awareness about lack of access to energy, and we have a good sense of the cost of achieving universal access to modern energy services, we have still not determined a path for raising and administering the necessary funds required to deliver energy access to those in need,” said Dr. Birol.

“That is why the World Energy Outlook 2011 will publish a special excerpt that presents a new architecture for financing universal modern energy access. We will present this analysis to a special high-level meeting hosted by the government of Norway in Oslo in October 2011, which will be attended by top representatives of governments, international institutions and other key groups,” he explained. “We sincerely hope this meeting will spur further progress towards global energy access by setting the necessary milestones.”

“As we build up to the ‘International Year of Sustainable Energy for All’, the global community must rally together to make sure that access to energy becomes a right that is not only enjoyed by the majority, but by each and every citizen of the world.”

Key questions

What is Energy Poverty?
It is a term which refers to a lack of access to modern energy services. These services are defined as household access to electricity and clean cooking facilities (e.g. fuels and stoves that do not cause air pollution in houses).

What are the Millennium Development Goals?
The eight Millennium Development Goals (MDGs) are global commitments to eradicate extreme poverty. They were agreed to by all the world’s countries and all the world’s leading development institutions in September 2000. For more information, click here.

What is the World Energy Outlook?
It is the IEA’s annual flagship publication, which provides updated projections of energy demand, production, trade and investment, fuel by fuel and region by region to 2035. Click here to read an excerpt from the World Energy Outlook 2010, which focuses on Energy Poverty.