PRESS CONFERENCE TO LAUNCH WORLD ENERGY ASSESSMENT REPORT

Press Briefing

PRESS CONFERENCE TO LAUNCH WORLD ENERGY ASSESSMENT REPORT

While industrialized countries were growing at less than 1 per cent per year, the 4 per cent annual growth rate of the developing countries would double their energy consumption in 15 years and make them major players, Jose Goldemberg, Chairman of the World Energy Assessment (WEA), said at a Headquarters press conference this afternoon.

Speaking during the launching of the WEA report, "World Energy Assessment: Energy and the Challenge of Sustainability", Mr. Goldemberg noted that by contrast, the present energy consumption of the developing countries was only one-third of the world total. The current turmoil in the world energy sector meant that approximately 2 billion people in the developing world lived permanently in conditions of energy shortages, unreliable supplies and rising prices -- an enormous humanitarian challenge and a source of political instability. On the other hand, the industrialized countries were beset by environmental problems, choked cities and changing climate.

The report was produced jointly by the United Nations Development Programme (UNDP), the United Nations Department of Economic and Social Affairs and the World Energy Council (WEC). Also present at the press conference were UNDP Administrator Mark Malloch Brown, Patrizio Civili, Assistant Secretary- General for Economic and Social Affairs, and WEC Secretary-General Gerald Doucet.

Mr. Golemberg stressed that while people generally had very little interest in energy, they were greatly interested in refrigeration, transportation, cooking needs, lighting and other energy services. Technology could do much to increase the services obtained from a barrel of oil or a tonne of coal. That point led to the fact that the historical link between energy use and gross national product could be broken, as it had been in Europe following the oil crisis of the early 1970s.

He said that the WEA's broad lines of action were well known: higher efficiency in energy use; greater use of renewable energy sources (currently representing only 2 per cent of total consumption, that use was growing rapidly at 30 per cent annually); and the improved use of new technologies, which would open new opportunities for both efficiency and renewables.

Obstacles to sustainable development involved perverse subsidies, barriers and an uneven playing field, he said. If one wished to build a hydroelectric power plant in a developing country, one could obtain a 20-year World Bank loan at 5 per cent interest. However, if one wished to build a wind power plant, the loan would have to be repaid in three or four years at the high interest rates prevalent in the developing world. That unevenness had to be solved.

Mr. Malloch Brown noted that in the debate on the fuel crisis in Europe, there had been almost no discussion of the environmental dimension. Furthermore, if rich Western consumers were so angry about fuel prices, what could be said about the poor in developing countries whose voices could not be

Energy Press Conference - 2 - 20 September 2000

heard? A year of increased fuel prices and falling commodity prices had had a huge impact on their family incomes.

Earlier, Mr. Doucet said that the mission of the WEC, which represents global companies involved in energy production and consumption throughout the world, was to promote the sustainable supply and use of energy for the greatest benefit of all. Those companies wanted the WEC to work with the United Nations to help reinforce the role that markets -- price and payment systems -- played in sustainability and clarify the need to keep energy options open, particularly in view of the present volatility of oil prices.

Mr. Civili said that in many ways, the WEA exemplified the new United Nations -- one that encouraged strong partnerships within the Organization itself, as well as with civil society and the academic and scientific communities, while contributing substantively to policy development and stimulating innovative actions that affected day-to-day life.

Asked whether Europe's fuel price protests had been short-sighted, Mr. Goldemberg said the crisis would accelerate the search for new solutions. People would realize that they were witnessing a preview of what might happen when oil reserves disappeared. Governments in developing countries would conclude that they should diversify, as had been the case of some Latin American countries.

Another journalist asked whether nuclear energy was an option for developing countries. If not, was there any prospect of the developed countries exporting energy to them?

Mr. Goldemberg replied that prospects for nuclear energy in the developing countries were not brilliant, except in the Republic of Korea and Taiwan. There was much talk in all the others, but either their systems were not large enough or the technological capacity did not exist. While their marketing was strong, the developing countries could not realistically incorporate nuclear energy in the foreseeable future.

The nuclear energy option was being discussed while developing countries could barely afford existing sources, another correspondent noted. What message did that send?

Mr. Goldemberg said the basic message was that the developing world should not copy the model adopted by the industrialized countries in the nineteenth and early twentieth centuries. While still developing, they should incorporate modern technologies.

Why did the report indicate an increasing dependence on oil imports for the Organization for Economic Cooperation and Development (OECD) countries? another correspondent asked.

Greater oil dependence involved the exhaustion of internal production in the United States and other factors, he replied. However, serious repercussions on the developing countries, arising from prices and stronger competition for supplies, would awaken their governments to the need for alternative energy sources. * *** *