Press Briefing on energy and Millennium Development Goals

 

As the critical links between energy and the Millennium Development Goals were highlighted at a press briefing today, Susan McDade, Team Manager of the United Nations Development Programme (UNDP)’s Sustainable Energy Programme, told correspondents that reaching those goals would require much greater investments in the provision of energy services through foreign aid, business and national expenditures.

Ms. McDade, along with Vijay Modi, Professor at Colombia University, and Fatih Birol, Head of the Economic Analysis Division of the International Energy Agency (IEA), were briefing correspondents on three reports:  World Energy Outlook 2004 – Energy & Development (IEA); the World Energy Assessment Overview – 2004 Update; and Achieving the Millennium Development Goals:  the Role of Energy Services.

Ms. McDade stated that the action platform adopted several years ago at the Millennium Summit did not include any explicit goal on the topic of energy or energy services and UNDP believed that the Goals could not be reached without increased quality and quantity of such services.

She said that one of the goals, for example, was to reduce poverty all over the world.  “But historic evidence shows that without access to electricity, mechanical power and clean fuels it has not been possible for countries to undertake and achieve economic goals”, she noted.  All over the developing world, one of the main reasons preventing female children from participating in school activities was the burden of collecting fuel wood and also water, which affected their literacy and educational advancement.

Highlighting the key links between global energy use patterns and climate change, which is reflected in the Goals, she said one of the most pressing health and local environmental issues was the incidence of respiratory disease caused by indoor air pollution through the use of traditional fuel.  “In India alone, over two million people, primarily women, die every year from respiratory diseases caused by the use of traditional fuels”, she said.

The UNDP had, therefore, initiated work to look at the empirical links between energy and the Goals in preparation for the five-year review period, which would begin 2005.  Some of those were contained in the publication the World Energy Assessment Overview – 2004 Update.  The first such assessment was in preparation for the Commission on Sustainable Development 9 and, as CSD 14 and 15 approached, UNDP would continue to look at some of the links between energy and the Millennium Development Goals. 

Lending support to Ms. McDade’s overall premise, Mr. Modi said the Millennium Project would present a groundbreaking report to the Secretary-General on 17 January next year, which would examine how the world could get back on track to achieving the Millennium Development Goals.  “Energy services, the provisions of cooking fuels, mechanical power and electricity play a critical role in meeting these goals”, he said.  There were specific quantitative, time-bound targets for many of the Millennium Development Goals, such as those that addressed hunger, poverty, education, and health.  “There are, however, no quantitative targets for energy even though we understand that energy services and roads, for example, play a very critical role in enabling one to meet these goals.”

In an effort to try and create such quantitative targets, Mr. Modi went on to say, a workshop was held at the beginning of October attended by UNDP, World Bank, United Nations Industrial Development Organization(UNIDO), United States Agency for International Development (USAID), as well as representatives of utilities from several countries in sub-Saharan Africa.  The group agreed upon a set of five targets to be met by 2015.  The first was to enable the use of modern cooking fuels for at least 50 per cent of those who currently use traditional biomass fuel.  The second was access to reliable electricity for all the poor people who lived in urban and peri-urban areas.  The third was electricity for lighting, refrigeration and telecommunication for all schools, clinics, hospitals and community centres.  The fourth was access to mechanical power in all communities, while the fifth was access to all weather vehicular roads in each community.

“We estimate that it will take no more than $20 per capita per year to meet these targets [which] would make a substantial difference and embody a bold initiative …”, he said.

Adding to that, Ms. McDade said that there were currently 1.6 billion people in the world who did not have electricity -- about one third of the global population.  There were also over two billion people who relied on traditional biomass as their main source of energy.  In sub-Saharan Africa imported energy was one of the main sources of foreign indebtedness and for many economies over 85 per cent of all energy came from traditional biomass.  In countries that had achieved a certain level of economic growth, issues such as heating and cooking did not attract very much attention.  For many of the poorest countries, those same issues were key development bottlenecks that kept large numbers of the population in abject poverty. 

Mr. Birol, said one the major findings of the World Energy Outlook 2004, was that 1.6 billion people did not have access to electricity.  “This is morally and economically unacceptable.  And worse than that”, he continued, “if we don’t change our policies, in 2030 -- 25 years from now -- despite technological improvements and economic growth in sub-Saharan Africa, India and South Asia -- there will still be 1.4 billion people without access to electricity”.  The IEA believed it was time for a policy change, because the lack of access to electricity was one of the main components impeding economic growth in those countries.  And, it was not just an economic problem -- “We also believe that it very important for the security of the world”.  Poverty was the minefield of instability.  “So we tell our 26 member governments of the Organisation for Economic Cooperation and Development (OECD), from the United States, Europe, Asia and the Pacific, that it is time to act now.”  The Millennium Development Goals provided a good opportunity for that.

If we wanted to reach the Goals, electricity must be provided to an additional 500 million people, he added.  That would cost $16 billion each year, which was really “peanuts” in the current global capital transaction markets.  Decisive and concerted international efforts were needed.  His agency, the IEA, representing 26 countries, was ready to support those efforts.

Referring to the recent turmoil in the Middle East and the steep rise in oil prices to $50 per barrel, correspondents wanted to know how difficult such developments would make it to achieve the Millennium Development Goals and whether it would be easier for an oil exporting country to achieve the Goals.

Ms. McDade said that due to the increases in oil prices for countries that imported oil, especially the poorest, the incremental cost of the spiralling oil prices in many countries had offset the entire amount of foreign aid that they received.  For the heavily indebted African countries, in particular, the oil price increases had basically wiped out the effect of all foreign aid received by those countries in the current period.

Mr. Birol said the IEA had done a study with the International Monetary Fund (IMF) on the impact of high oil prices on economies.  “What we see is that the economies of all the oil important countries of the world will be hurt.”  The developing countries, however, would be hurt the most and hinder the achievement of the Millennium Development Goals.  Regarding the oil exporting countries, he said a recent study had showed that revenues earned by energy were not necessarily channelled towards socio-economic development in those countries.  Watch where oil revenues go, he said.

Responding to question about what appeared to be their lack of optimism for the achievement of the Millennium Development Goals in certain parts of the world, Ms. McDade said the period specified for those goals went up to 2015, adding that it would be premature to render a decision now as to whether they would be met.  “What is clear, though, is that business as usual regarding energy will not lead to a supportive condition for reaching the MDGs”, she said.  Reiterating that, Mr. Birol said “if we do not change our policies, especially those in the rich countries, it will be very difficult to reach the MDGs.”

Revisiting the issue of oil producing countries, Mr. Modi drew attention to Chad, a sub-Saharan country which over the next 20 years would be exporting close to a billion barrel of oil.  Therefore a $20 excess price was about $20 billion.  Of course that would not go to Chad because of the complex oil contracting that was in place, even though the extra $20 billion could dramatically alter conditions for the people there.

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