energy for sustainable development a policy agenda The United Nations Development Programme (UNDP) is the United Nation’s global development network, advocating for change and connecting countries to knowledge, experience and resources to help people build a better life. UNDP is on the ground in 166 countries, working on solutions to global and national development challenges. As local capacity is developed, national counterparts draw on the people and partners of UNDP. The International Institute for Industrial Environmental Economics (IIIEE) at Lund University, Sweden, exists to bring new knowledge, education and renewed creativity to the urgent global search for sustainable systems of production and consumption. Engaging with industry, government, academia and civil society, the Institute aims to influence the process of sustainable development, and demonstrate the value of preventative approaches which address social, cultural, economic and environmental issues. The International Energy Initiative (IEI), headquartered in South Africa, exists to promote – initiate, strengthen and advance – the efficient production and use of energy for sustainable development. IEI is a Southern-conceived, Southern-led and Southern-located South-South-North partnership. It is a small, independent, international non-governmental public-purpose organization led by internationally recognized energy experts, and with regional offices, staff and programmes in Latin America and Asia. energy for sustainable development a policy agenda Edited by: Thomas B. Johansson and José Goldemberg International Institute for Industrial Environmental Economics, Sweden International Energy Initiative United Nations South Africa Development Programme Copyright © 2002 UNDP All rights reserved United Nations Development Programme Bureau for Development Policy One United Nations Plaza New York, NY 10017 USA www.undp.org The analysis and conclusions in this volume do not necessarily reflect the views of the United Nations Development Programme, its Executive Board or the Member States of the United Nations. ISBN: 92-1-126145-7 Sales Number: E.02.III.B.7 Layout: apostrof´, Lund, Sweden Printed by: Rahms i Lund AB, Sweden contents foreword vii Mark Malloch Brown overview Overview and A Policy Agenda 1 Thomas B. Johansson and José Goldemberg chapter 1 The Role of Energy in Sustainable Development: 25 Basic Facts and Issues Thomas B. Johansson and José Goldemberg chapter 2 Making Markets Work Better 41 Mark Jaccard and Yushi Mao chapter 3 Towards Sustainable Electricity Policy 77 Walt Patterson, Anton Eberhard and Carlos E. Suárez chapter 4 Energy Technologies and Policies for Rural Development 115 Amulya K.N. Reddy chapter 5 The Innovation Chain: Policies to Promote Energy Innovations 137 Wim C. Turkenburg chapter 6 Capacity Development 173 Daniel Bouille and Susan McDade About the Authors 207 List of Figures, Tables and Boxes 211 Abbreviations 213 Index 215 Acknowledgments We gratefully acknowledge the editorial assistance of Rosemarie Philips in completing Chapters 1 through 6. We are also grateful to Janet Jensen for her editorial assistance in distilling the messages of the various chapters into the overview. Foreword Ten years ago in Rio de Janeiro, the international community agreed on the overarching goal of sustainable development and it adopted a plan on how to get there – Agenda 21. The importance of energy systems in supporting many dimensions of sustainable development was a theme that echoed throughout Agenda 21. Subsequent global conferences, dealing with small island states, social issues, women, human settlements, and food security also acknowledged the critical linkages between energy systems and many specific development concerns. In the platforms of action from each of the major United Nations conferences in the five years after Rio, there were consistent and clear calls for improved energy efficiency, commercialisation of renewable energy, technology transfer, and legislative and price reform to create what has become known as an ‘enabling environment’. Five years after Rio, the Special Session of the General Assembly formally recognized the need more sustainable energy use patterns. For the first time, an intergovernmental process focusing on energy was created to prepare for the ninth session of the Commission on Sustainable Development, which took place in New York in April 2001. For that meeting, UNDP – in collaboration with the UN Department of Economic and Social Affairs and the World Energy Council – prepared the World Energy Assessment: Energy and the Challenge of Sustainability, a comprehensive analysis of available energy resources and technological options to support sustainable development. The assessment concluded that we do have the resources and technological know-how to rise to the challenge of energy that supports sustainable viii Energy for Sustainable Development: A Policy Agenda development. Doing this will require major shifts in policy – it will not simply happen on its own. More recently, the world agreed on a common global development agenda at the Millennium Summit in August 2000 reflected in the Millennium Development Goals (MDGs). These ambitious objectives, particularly the overarching goal of halving extreme poverty by 2015, simply will not be met if the world cannot make rapid progress in extending efficient and affordable energy services to the 2 billion people currently who rely on traditional forms of energy for heating and cooking and to the 2 billion who have no access to electricity. Indeed, all the MDGs will require vast increases in the quality and quantity of energy services in developing countries if they are to be achieved. In the ten years since Rio, the world has gained a more thorough understanding of the problems associated with energy use and of the actions that need to be taken. As we approach the World Summit on Sustainable Development in Johannesburg energy, and its relation with poverty reduction and changing patterns of consumption and production around the world, has emerged as one of the hottest topics. A huge increase in the scale, pace, and effectiveness of policy initiatives and measures will be required to shift energy systems and services to support sustainable development and to achieve the MDGs. Some countries have made enlightened energy policies a priority, and many of their experiences are reflected in these pages. This book is intended to share information about such experiences and to shed light on policy options that can support an equitable, safe, healthy and prosperous world using energy as an instrument for sustainable development. mark malloch brown Administrator United Nations Development Programme Overview and A Policy Agenda 1 Overview and A Policy Agenda thomas b. johansson and josé goldemberg Modern forms of energy empower human beings in countless ways: by reducing drudgery, increasing productivity, transforming food, providing illumination, transporting water, fuelling transportation, powering industrial and agricultural processes, cooling or heating rooms, and facilitating electronic communications and computer operations, to name just some of them. Given that they can so dramatically increase human capabilities and opportunities, adequate energy services are integral to poverty alleviation and environmentally sound social and economic development. For such development to be sustainable, in the well-accepted definition put forth 15 years ago by the World Commission on Environment and Development, it must not compromise the prospects of future generations. Conventional sources of and approaches to providing and using energy are not sustainable by this definition. They are linked to significant environmental, social, and health problems for people alive today and, in many cases, pose even greater threats to future generations. While it is imperative to find ways to greatly expand energy services, especially to the two billion people who currently rely on traditional forms of energy as well as for generations to come, this expansion must be achieved in ways that are environmentally sound, as well as safe, affordable, convenient, reliable, and equitable.
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