Power up: Sustainable energy in Developing Economies

Sustainable Energy

With the global population growing and industrialization spreading in developing countries, humanity’s hunger for energy has reached unprecedented levels. Currently, energy is the largest source of greenhouse gas emissions from human activities, and developed countries are the main ones responsible for this crisis. The average person in these countries consumes 100 times more than the average person in some of the poorest countries. 

With increasing awareness about the environmental effects of burning fossil fuels, the call for a more sustainable base has never been louder. All around the world, developed countries are powering towards a low-carbon future by embracing solar, wind, geothermal and other renewable energy sources. However, developing and emerging countries still face challenges regarding this new transition.

Making a distinction between these two types of countries, developing countries rely primarily on agriculture, having a low income per capita. On the other hand, emerging countries have already witnessed economic growth due to the development of the industrial and technological sectors.

Sustainable Energy in Developing Countries

Energy access is not equally distributed around the globe. In fact, many developing countries, like Kenya or Ethiopia, are just starting their process of industrialization, and electricity is still not available to everyone, as approximately 13% of the global population still lacks access to this primary need. 

Energy poverty is not only a matter of sustainability, but also a major problem for human physical and mental health. It is estimated that, around the world, people spend a combined 200 million hours a day collecting water, a colossal waste of their valuable lifetime.

This crisis affects women disproportionately, making up nearly 75% of those affected by energy poverty. Women are the main consumers of electricity in households since social norms have (sadly) assigned them the responsibility of housing chores like cooking or washing, which require electricity, making them especially vulnerable to the effects of energy poverty.

Moreover, it affects health through different pathways. Exposure to cold temperatures due to the lack of energy is known to be associated with high blood pressure, heart attack and stroke risks, among other diseases. This impacts the day by day of every individual that lives under this circumstance, from the child that cannot have a properly cooked meal to the doctor that could not save a life due to the lack of electricity. 

Insufficient energy also jeopardizes agriculture and manufacturing, thus keeping the poorest countries trapped in a vicious circle between energy poverty, air pollution and inequality; and they cannot afford the energy that can drive them out of this cycle. So, what is stopping countries to ensure worldwide energy access in an affordable, reliable, and sustainable way?

Developing nations are quite different within themselves, but they face similar challenges when it comes to energy sustainability. Let’s unwrap the idea a little more. One of the biggest constraints to attaining the previous goal is geographical, as the population in need is primarily concentrated in rural regions with no grid energy, and its extension is frequently financially and logistically impossible. In truth, fossil fuels were at the heart of industrial revolution, providing huge economic benefits to Western countries. Burning fossil fuels enabled an era of explosive growth for selected countries leading to extensive advances in productivity, income, wealth and living standards. 

As developing countries now express the wish to industrialize and share those same benefits, they must find a way to do so sustainably. They cannot let themselves fall into the same fossil fuel dependency trap western economies did. Therefore, the future must be sustainable, and renewable energy should receive early attention in these high growth areas. Improving efficiency and reducing carbon dioxide is easier and less expensive to achieve at the time of the new construction for energy, rather than at later stages. So, it is indeed an initial investment worth making. Besides that, many of these initial costs are money that otherwise would have been spent on fossil fuel exploration, extraction and conversion to electricity. 

In the long-run, sustainable energy alleviates a country´s balance of payments. The initial investment could be high, however, renewables, like solar or wind, are the cheapest source of power. Also, most developing countries have abundant renewable energy resources, which decreases manufacturing costs. Thus, this gives developing countries a competitive advantage when compared to emerging economies. 

This idea is not just as theoretical and utopical as it may seem. Sustainable energy is already making an impact in the developing world, with many developing countries using renewable energy sources, an idea considered science fiction only a few years ago. In the last few years, these nations invested more in these technologies than developed countries, accounting for 63% of global investment in renewable energy (when viewed on per gross domestic product basis). However, it is important to refer that the economic distress caused by COVID-19 may jeopardise future investments.

Power Africa

Two out of three people in sub-Saharan Africa lack access to electricity, being one of the most serious barriers to long-term economic growth and development in this region. Launched in 2013 by President Obama, Power Africa program’s goal is to install at least 30 000 megawatts of cleaner and sustainable energy by 2030, as well as 60 million new households and businesses. It is meaningful to select and prioritise efforts. Policymakers must continue to develop effective policies to secure a successful transition to sustainable renewable energy systems within the framework of sustainable development. 

Sustainable Energy in Emerging Countries

The main problem regarding sustainable energy in emerging economies lies in the transition from fossil fuels to renewable energy sources for electricity generation. Part of the industrialization of emerging economies, like China or India, involved already non-sustainable energy, using fossil fuels, so there are already sunk costs when investing in sustainable energy. Countries such as Costa Rica and Brazil use renewable energy as their primary source of energy, accounting for 90% of Costa Rica’s and 85% of Brazil’s energy production.

In the last decade only, China has grown to become a renewable superpower, dwarfing all developed countries in terms of renewables. China is also making efforts to become an important environmental partner for African countries, providing financial and technical assistance to developing countries. Recently, it also announced two new Chinese funds totalling US$ 5.1 billion to help developing countries tackle climate change and development problems. 

War Impact

However, there is a danger that countries will not use this event as a chance to make deep, structural changes to their energy systems, but as an opportunity for quick profits. A European ban on Russian imports will leave large quantities of oil ready for the taking, which could be an incentive for other countries to do just that. India, for example, has already begun to heavily import Russian crude. If prices rise, they stand to gain a reasonable profit from refining Russian oil and selling it onwards, for example, to Europe.

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Sources: Open Edition Journals, Our World Data, Science Direct, OCDE, Enel, Inspire Clean Energy, The Economic Times.