Thursday, 3 April 2014

Guest blogpost: Andrew Barnett on low carbon development trade offs

Solar charger, Kenya_Solio_Flickr Creative Commons
Andrew Barnett, Director of The Policy Practice, inspired by the discussion at The Royal Society on Monday 31 March 2014 to discuss the policy implications of research on low carbon development and sustainable energy access in low-income countries, writes for the STEPS Centre blog.
I very much enjoyed meeting the teams from Science and Technology Policy Research (SPRU) at the University of Sussex, the STEPS Centre and the African Technology Policy Studies Network (ATPS) group from Kenya. Their recent working paper 61, Sustainable energy for whom? Governing pro-poor, low-carbon pathways to development: Lessons from solar PV in Kenya, provides a useful contribution to the field, not least by providing a detailed history of Photo Voltaics development in Kenya. The paper draws strongly on the huge intellectual legacy from many years of research at SPRU on the limits to simplistic views of technology transfer and the need for an innovation systems approach to the management of technical change.

In this blogpost I would like to see if I can help to build on this work. The paper makes the point that there is a perception of a “tension… between increasing energy access and pursuing low carbon development” (p Xii and page 2). But it seems to me that it is a great deal more than a perception and this trade-off may well be one of the key intellectual issues in this area of research. There are now a number of authoritative sources to suggest that there can be a trade-off between these two objectives and they cannot be so easily dismissed. No less an authority is the current chief economist at DFID, Stefan Dercon, who wrote a paper for the World Bank on this topic, see Policy Research Working Paper 6231, He concludes:
“Green growth is in no way necessarily bad for the poor. But the key message of this paper is that promises that green growth will offer a rapid route out of poverty are not very plausible; there may well be less rapid an exit than with more conventional growth strategies. To sustain growth, green growth also needs to be weighed in terms of its ability to reduce poverty. To sustain poverty reduction, green growth may involve giving up some possible environmental benefits, to keep the growth-poverty elasticity high. Since poverty reduction remains at the top of the agenda, different shades of green may be needed. In particular, poverty reduction is a powerful force for giving the poor more resilience to the increasing risks of climate change; they should not be asked to pay the price for greening the planet.”
For me understanding that a trade-off CAN exist is at the heart of the “political economy” that is increasingly seen as being of critical importance to understanding apparently illogical human behaviour in this area (see Of course if there is to be lots of genuinely 'new money' for low carbon growth, it is a laudable objective for academics to see how they can help to capture as much of it as possible for the poorer people of Africa. But for me the SPRU analysis would be strengthened if it accepted and dealt with the possibility of a trade-off. Indeed if the possibility of a trade-off were put at the centre of the work it would lead nicely onto the other issue at the heart of the STEPS programme namely the existence of “diverse pathways“. The issue is NOT (as suggested at the meeting) that new technologies always start off less competitive than established technologies, it is that from among all the possible future pathways some will contribute more to energy access and others will contribute more to low carbon “development” for a given level of resource input (by the way there does not appear to be as much effort into unpacking the concept of "energy access", or even development, as are applied to other terms in the analysis – the reduction of energy poverty must surely involve USE of modern energy services and a view as to what is considered to be an adequate or minimum level of consumption).

A related, but different, point is raised when the report says in passing that “many low carbon alternatives are not yet competitive with carbon intensive technology options” (page 23). This is likely to be true, but it also seems to need more analysis in any discussion of modern energy services and poor people. Not least of the reasons being that it goes a long way to explain the behaviour of governments that act on the belief that at least FOR THE MOMENT PV are too expensive for many of their poor people. A number of high officials in Tanzania, and researchers in Kenya (such as Stephen Karekezi, Director of AFREPREN/FWD) explicitly explained this to me in the 1980′s.

The other key issue that you have to confront when talking of the energy needs of poor people is that most poor people do not currently have sufficient “access” to any modern energy services, whether low or high carbon, primarily because they are poor. If our analyses are to be useful they must address this issue head on and centrally. One of the report’s team said at the Royal Society meeting that “subsidies are essential” if poor people are to have access to low carbon energy options. I am happy to support this view, but it is almost trivial as a conclusion. The report’s main conclusion states that market forces alone will not drive the widespread uptake of low carbon energy technologies in low-income developing countries”. But surely the interesting point is what is said next. The team needs to say more about what "market making subsidies" would look like as there are already well documented cases of market destroying subsidies. But more importantly the team could make much of their SPRU colleague’s work on the need for the state to undertake risky equity investments if innovation is to be dynamic, and to demand an equity return on their successes (see Prof Mariana Mazzucato, Professor in the Economics of Innovation at SPRU).

If the main problem of "energy access” for poor people is poverty then the team also could say useful things about the need for energy end-use technologies that provide the energy services that help people to increase their incomes. This is of course a complex area, but then SPRU has never been frightened by complexity!

While the PV industry provides a most useful case study (and clearly the team know a great deal about PV), the policy analysis would be strengthened by locating this work within the broader focus (framing?) of other energy delivery systems (both for electricity, and for the other energy services that poor people need/want, such as heat for cooking). This would open up a number of other "diverse pathways", some of which are also low carbon (such as co-generation from agricultural waste, hydro and geothermal electricity to name but three). This is a big ask of course, but it would also underline the many trade-offs within the low carbon scenario.

Photo Voltaics are already the least cost source of electricity in more remote areas, and for sparsely populated areas (particularly for LED lighting, phone charging and radio). But for me the relative success of PV in densely populated parts of the world is an index of the failure of power sector reform in that particular country. Such reform is where agencies such as DFID would get the biggest bang for their aid buck. Focussing solely on PV diverts their attention from these more critical concerns. It is noteworthy in this context to remember that while PV is flourishing in Kenya so are the companies supplying electricity to Kenya from fossil fuels at huge cost per kilowatt hour in name of emergency power! We must guard against continuing to play our favourite violins when Rome is clearly burning!

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