Energy & Poverty

Welcome to Lecture eight on energy and development. In this lecture, I want to discuss not the high income and high energy using countries of the world, but the parts of the world that are poor and energy poor, those that use very little energy, emit very little of carbon dioxide and other greenhouse gases per person and yet are bearing the brunt of global climate change.

Today I want to talk about the poorest of the poor. The poorest of the poor are a population of around one billion people, mainly in Sub-Saharan Africa and in parts of South Asia who consume very little modern energy, who emit very little greenhouse gas emissions through their economic activities and yet who ironically bear a huge amount of the brunt of human induced climate change. So it behooves us morally, practically, ethically as part of an overall concept of global sustainable development to focus our attention on those most in need, least responsible for global climate change, absolutely desperate for modern energy resources and right now not at the center of the negotiations certainly on climate change but needing their place at the table to say,”we’re part of this, we need modern energy, we need the world to help us face the challenges that haven’t come from our part, but have become our burden through what’s happening in other parts of the world.”

To do this, let’s start in lecture one on the whole question of the relationship of energy and economic development. And I’ll start with this iconic picture known throughout the world. It’s a great satellite shot of NASA’s satellites looking at the night vision image of the earth. And of course what’s shown here in the lights are the places with nighttime electricity and we have a very vivid image of the eastern half of the United States in bright lights.

The western half, other than all the way on the west coast, California, being sparsely populated and America’s drylands. You see the bright lights of western Europe. You see the bright lights of Japan and coastal China. And the bright lights of the eastern seaboard of Australia. And the east coast of South America stretching from Rio and Sao Paulo to Buenos Aires and the strong economic development in that region. And you also see the vast preponderance of Africa, almost without night lights.

There is a very thin strip of electrification in the very north of Africa, the northern African countries of Morocco, Tunisia, Algeria, Libya and Egypt. There is the lights evident in South Africa. But in the whole tropical band of Africa, in between North Africa and South Africa you see very little of nighttime lights. And this is an extraordinary and very vivid demonstration of the fact that hundreds of millions of people, especially in rural Africa lack access to electricity and to other modern energy services.

We can see this in a less stylized and vivid way through a measure shown in this graphic of the amount of every use per capita in the world. And again, we see the very high use of energy in the United States and Canada and Australia and New Zealand, in the Persian Gulf, Saudi Arabia and the whole Arabian peninsula, in western Europe. But that strong area of tropical Africa where you see the greens and the blues in this depiction show that these are the countries with the absolutely lowest consumption of primary energy per capita in the world.

Now this is a quite different map, but it looks almost the same in terms of the distribution across countries. This is a map of income per capita. And just as we have very high energy use per person in Canada and the United States and Australia and New Zealand and western Europe and Japan, here we see that these are of course the countries with the highest per capita gross domestic product in the world. And where is the poorest part of the world? Once again, it is tropical Africa. In between the northern African countries and South Africa, we see countries that are living where half the population and sometimes more is below the line of extreme poverty drawn by the World Bank at a $1.25 per person per day. Energy use and output per person and income per person all are very, very closely aligned in this world. And one can say indeed that access to modern energy is a fundamental necessity for having a modern economy.

Primary energy use, access to electricity, access to other modern energy services for transportation, for home use, such as for cooking, for use in provisioning basic services such as clean water and sanitation, it is a sine qua non of economic development. It’s not surprising therefore that when we graph on the horizontal axis, again the income per person in countries and we graph on the vertical axis, the amount of energy per person, here measured as kilowatts per person, you find almost a straight line fitting through this scatter of countries.

On the lower left-hand side you have the poorest countries with the lowest energy consumption. And on the upper right-hand side you have the high income countries that also have high consumption per capita. This is verified in very detailed accounts, for example, the energy data that are produced annually by the International Energy Agency. And I want to draw your attention specifically to Africa. Now in the geographic classification used by the International Energy Agency, Africa in this table includes North Africa and South Africa. In a way therefore, it will tend to overstate the energy use in that tropical band which is the poorest part of the continent. But still the numbers are absolutely telling. We see that as of 2011 in the classifications use by the International Energy Agency, Africa is roughly one-seventh of the world’s population, about a billion people out of around seven billion. So Africa’s population share is 15% of the world total.

In terms of output, since Africa is poor, with low income per person, its total output is of course less than its population share. We tend to measure output when we want to make international comparisons at what are called purchasing power adjusted prices. So we look at the annual output in Africa or in any other part of the world, measured at international prices for the goods and services that are being valued. And when we use that classification, gross domestic product at purchasing power parity or the PPP that you see in the table, Africa’s economy in total is $2.8 trillion dollars according to the measures of the International Energy Agency. For the world as a whole, annual output, the gross world product at international prices was $70.3 trillion dollars. So Africa’s share of output was only 4% of world output compared to the population share of 15%. And now look at the columns on the right which measure total primary energy use and electricity consumption.

For total primary energy measured as millions of tons of oil equivalent, taking all of the energy sources, putting them into an energy equivalence as tons of oil, we find that Africa had a total use of 700 million tons oil equivalent of energy compared to 13,000 million, 13 billion tons of oil equivalent for the world. Just 5% of the world’s energy. And for electricity consumption, measured in terawatt hours, again, even less than the primary energy use, just at 3% of the world electricity consumption. And finally, not surprisingly, given Africa’s very low use of electricity and low use of primary energy overall, Africa’s carbon dioxide emissions of course are a very, very tiny part of the problem. They constituted about one billion tons of CO2 emissions in 2010–sorry, 2011 data–and that is out of about 31 billion tons that year worldwide. So Africa’s emissions are only 3%.

Fifteen per cent of the world’s population, three per cent of the emissions, or one-fifth per person of the world average emissions. Think of the other end that we’ve been focusing on in the deep decarbonization pathways discussion. Just the five major economies of the world, China, the United States, European Union, India and Russia, just those five account for two-thirds, 65% of the world’s total emissions. So a few very big, quite wealthy economies in general are at the top end of energy use and at the top end of emissions. And a very significant part of the world and a large part of the world population, in Africa, is impoverished, using very, very low amounts of energy and emitting a very small proportion of the carbon dioxide emissions and the greenhouse gas emissions more generally.

Now I think it’s quite interesting actually to look back historically at both how Africa’s poverty in income terms and its energy poverty, the phrase that is now widely used, have been part of the long history of the continent. And through no fault of Africa, I want to stress, one of the most telling aspects of modern economic development is that it has taken place primarily in countries that had adequate domestic energy resources. The industrial revolution took off originally in England, in a place where coal resources were vast and where the creativity of James Watt in inventing the modern steam engine at the, towards the end of the 18th Century made it possible to tap this large coal resource and help propel England and Britain to the forefront of global economic development. When one traces the history of industrialization in the 19th Century, coal is a big part of the story. If the country had it there was a pretty good chance that it could achieve industrialization in the 19th Century. The United States is an example of that. Australia is an example of that. Japan is an example of that. But notably in looking at this map of coal reserves, ironically, tellingly, there were certain parts of the world that just don’t have coal.

This isn’t a matter of their governance, their strategy, anything else, it’s a matter of their basic geology. And what you can see on this map is that the continent of Africa with the small exception of the very southern tip of Africa, the part of South Africa is essentially without any significant coal reserves. This was an absolutely decisive factor in Africa’s continuing underdevelopment in the 19th Century. Not only did it make industrialization virtually impossible in the 19th Century and even countries in north Africa that tried to industrialize found out that they couldn’t do it because they didn’t have access to low cost modern energy resources. But because the lack of coal put Africa in such a weak position, it also rendered the continent vulnerable to the total conquest by Europe towards the end of the 19th Century. It was one of the factors that made Africa vulnerable to imperial domination for about a hundred years from the second half of the 19th Century to the 1960s to ’80s. So simply the access to energy resources was a propellant of development.

And the lack of access to these resources was a pretty fundamental barrier to development. Towards the end of the 19th Century, coal became less decisive because with the invention of the internal combustion engine, petroleum became a more important resource.

And while Africa has a few pockets of petroleum resources, we find essential the same story as we found with coal, that while Africa is a bit better provisioned with oil and there are parts of Africa such as Nigeria or Gabon or Angola with significant hydrocarbon resources, measured in per person terms and looked at in the aggregate, sub-Saharan Africa is once again, relatively on the short side compared to the United States, compared certainly to the Arabian peninsula and the Persian Gulf region and other parts of the world.

We could say that fortunately there have been some important discoveries of oil and natural gas in recent years in some of the poorest parts of the world and parts of Africa, notably in Mozambique and Tanzania, off the coast, this gives a chance for domestic-based energy in very poor countries that never had it before. What’s the moral of the story?

The moral of the story is that Africa remains today impoverished in part because of the lack of modern energy services. In order for Africa to develop it’s going to absolutely require an infrastructure of modern energy.

Fortunately there are a lot more choices today for that than there were in the 19th Century, while coal was indisputably the king during the first phase of industrialization and now we’re going to see that because of the advent of low-cost photovoltaics and concentrated solar thermal energy, because of advances in potential for geothermal energy, for hydroelectric power, for wind energy, Africa now has a chance to develop modern energy services based on a much wider array of primary energy sources than ever before. And this is extraordinarily heartening.

For Africa to develop, it will need to develop the energy infrastructure. We should expect and we should build into all global forecasts and policies a significant rise of energy consumption and production within Africa to enable this part of the world, still the world’s poorest, finally to escape from the poverty trap and to achieve economic development. In the following chapters of this lecture I’m going to describe in far more detail how this can be accomplished.

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