the future

Leonard Good
describes increasingly successful worldwide efforts to promote clean energy and power sustainable development

Energy is the lifeblood of the global economy, and an essential prerequisite for development. In the industrialized world, high levels of its use have become synonymous with consumerism and modernity, while in developing nations, greater use is associated with meeting basic human needs. By providing sufficient light to extend the day, by supplying energy for cooking, and by powering a pump to eliminate lengthy, exhausting walks to fetch water, a small amount of commercial energy is the key to liberating millions from the burden of poverty. The gross disparity in per capita energy use is a sad reminder of the magnitude of inequities in access to basic services; in the least developed countries, electricity use per capita is only 1 per cent of what it is in the industrialized nations.

Access and impact
The challenge of energy for development is largely defined by two distinct but related issues: access and environmental impact. Expanding its supply to those who currently lack access to modern energy sources is critical. Some 2 billion people do not have access to electricity and can tap only limited sources of kerosene, charcoal or other low-quality fuels. Developing countries must generate more energy to reduce poverty and meet growing demand.

But increased use of commercial energy has significant environmental implications. Local air pollution causes perhaps 4 million premature deaths per year, mostly of young children exposed to dirty cooking fuels. The economic costs of air pollution amount to over $350 billion per year, or 6 per cent of the gross national product of developing countries. There is also the added global risk from climate change associated with the build-up of greenhouse gases from the combustion of coal, oil and natural gas. Despite their relatively low per capita consumption, developing countries have the fastest economic and population growth: within a few decades, their contributions to greenhouse gas emissions are likely to exceed those of industrialized nations. The Global Environment Facility (GEF) believes that accelerating the transition to efficient and renewable energy will bring enormous economic, social and environmental benefits. As the chief funder of renewable energy in developing countries, it is playing a leading role – in partnership with UNEP, the United Nations Development Programme and the World Bank – in expanding the introduction of clean energy technologies. In 12 years, its clean energy portfolio has grown to more than $1.6 billion in grants for projects with a total value of more than $10.6 billion.

Expanding renewable energy
Renewable energy is taking India, for example, by storm. The Government’s favourable investment tax policies, commercial financing and supportive regulations have all contributed to this. By 2000, almost 1,200 megawatts of wind capacity had been installed in the country, virtually all by the private sector. Dozens of domestic manufacturers have emerged and are already exporting high-tech turbines with variable speed operation. The GEF has helped finance 41 megawatts of wind turbine installations and 45 megawatts of mini-hydro capacity in the country through the Renewable Energy Development project, while the India Renewable Development Agency, strengthened through project assistance, has financed another 360 megawatts of wind farms and 130 megawatts of mini-hydro stations.

Similarly, the GEF has had a significant impact in expanding solar energy for electricity and hot water in countries as distinct as China, Peru and Ghana. Sri Lanka’s Energy Services Delivery Project is one of the world’s most successful solar undertakings: our contribution helped provide electricity for villages not served by the grid. By the end of 2002, almost 20,000 Sri Lankan homes had solar electricity through an innovative micro-financing approach that made it easier for rural people to obtain bank loans for the purchase of solar home systems. Meanwhile, a GEF project in Morocco is successfully expanding the use of solar hot water heaters that cost less than conventional water heating, and save energy. Government agencies and private firms were trained to promote, evaluate and install solar hot water systems in homes and businesses: so far 80,000 square metres of solar hot water collectors have been installed.

Transforming markets
Forward-looking energy companies seeking investment opportunities in developing countries are increasingly focusing on ensuring economic and environmental benefits. GEF is working on three continents to partner with them and share the risks of expanding markets for renewable energy and energy-efficient products, accelerating a worldwide transition to clean energy. One new project, to transform the market for energy-efficient refrigerators in China, is already altering the fundamental structure of the marketplace through new refrigerator standards. Another project, in Poland, has had a significant impact on the market for compact fluorescent lamps. Lower prices – through a manufacturer subsidy – combined with a mass media campaign, resulted in sales of over 1.2 million of the lamps in three years, and increased the proportion of Polish households using them from one in ten to one in three. The project clearly demonstrated the financial and commercial benefits of energy-efficient lighting, saved large amounts of power, and reduced emissions from coal-fired generating plants.
Some 15 per cent of the world’s energy consumption already coming from renewables

Bright future
Worldwide efforts are using energy-efficient lights, solar, wind, geothermal, biomass and small hydropower technologies for electricity generation, heating, cooling, lighting and other productive activities. With some 15 per cent of the world’s energy consumption already coming from renewables, the future looks really bright. More than 1 million homes in the developing world are now powered by solar energy, while wind capacity has increased from zero to over 1,700 megawatts – enough to power more than 5 million typical homes. India alone now has 40,000 solar streetlights. India and China are poised to add more than 10 million solar systems in coming years, while some 60,000 systems are anticipated in Argentina and 300,000 more in the Republic of South Africa.

GEF strategies to promote clean energy increasingly emphasize the need for sustainable business models, country partnerships and financial leverage. The renewable energy industry is now worth over $10 billion per year and growing in double digits. Thirty major firms, including BP and Shell International, have announced plans to invest from $10 to $15 billion in renewable energy worldwide in the next five years. Development agencies have expanded their efforts to foster market growth by working to remove market barriers. And some markets for renewable energy in developing countries, such as in Kenya, have emerged without any explicit development assistance, primarily through private sector initiative. We will continue to stimulate such innovative investments and to play a leading role in promoting clean energy

Leonard Good is CEO and Chairman of the Global Environment Facility.


The Global Environment Facility unites 175 member governments – in partnership with the private sector, non-governmental organizations and international institutions – to address complex global environmental issues while supporting national sustainable development initiatives. It has allocated $4.5 billion in grants and leveraged $14.5 billion in additional financing for more than 1,200 projects in over 140 developing countries. In August 2002, donor nations pledged an additional $3 billion, the largest replenishment ever, to expand and accelerate its work.

This issue:
Contents | Editorial | Key to development | The energy challenge | Plant power | Bioenergy: doing well while doing right | New energy for development | People | Delivering Change | Benign growth | Green energy | At a glance: Energy | Sustainable Dreams | Brightening the future | Greening oil | Blue-sky thinking | Books & products | New energy to assault poverty | New energy entrepreneurs | Time to get serious | Breaking the ice | In my lifetime – 100% renewable| Slimming the waste

Complementary issues:
Global Environment Facility, 2002
WSSD, 2002
Energy, 2001
Transport and Comunications, 2001
Disasters, 2001
Climate and Action, 1998
Climate Change, 1997
UNEP 25, 1997

AAAS Atlas of Population and Environment:
Natural Resources
Air Pollution
Climate Change