USING UP REMAINING COAL AND OIL WILL INCREASE GLOBAL POVERTY| 21/06/2004

http://www.neweconomics.org/gen/z_sys_publicationdetail.aspx?pid=182 [2]

RENEWABLES CAN MEET ALL HUMAN NEEDS, SAVE
MILLIONS AND PREVENT COMING ENERGY SHOCK

A fast approaching global energy and climate
crisis threatens to reverse human development,
says a new report, The Price of Power, released
by nef. But even a small shift of support away
from fossil fuels toward clean renewable energy
could save millions of lives and help avert
global warming.

The combined spiraling costs of climate change
and dwindling supplies of oil mean that without a
major shift to renewable energy, internationally
agreed targets to reduce poverty will not be met
and people in all countries will suffer a
progress-reversing energy shock. The growing
threat to the conventional energy supply means
any long-term efforts to improve the human
condition will have to be linked to renewable
energy sources.

The report shows how "business as usual"
development strategies that continue to plan to
meet expanding energy needs with fossil fuels are
self-defeating and doomed to failure. The costs
of 'natural' disasters mostly linked to global
warming hit $60 billion in 2003, of which $15
billion were insured.

The report shows that renewable energy has the
potential to more than meet growing global energy
demands. Currently renewables account for around
13 percent of global energy supplies but there is
technical potential to increase that by around
120 times. Yet a shift to renewables depends on
removing distorting subsidies on fossil fuels and
proper investment in clean energy.

The report highlights the possibilities of using renewable energy:

At the moment, only one to three per cent out of
the $40 billion spent annually on energy
investment in developing countries goes towards
renewables.

Indoor pollution accounts for 2.2 million deaths
and costs the world between $150 billion and $750
billion per year - 0.5 to 2.5 per cent of the
world's GNP - mainly in lost production through
sickness and death. But by spending just five per
cent of their total annual overseas aid budget on
clean-technology stoves for poor households, OECD
nations could help save over 25 million lives
over the next decade.

All of non-electrified Sub-Saharan Africa could
be provided with energy from small-scale solar
facilities for less than 70 per cent of what the
wealthy OECD countries spend on subsidising dirty
energy every year.

One year's worth of World-Bank spending on
fossil fuel projects, if redirected to
small-scale solar installations in Sub-Saharan
Africa, could provide ten million people on the
continent with electricity. And, the annual
amount tied to investments in coal, oil and gas
projects in the developing world between 1992 and
2002 by US agencies could have provided over 30
million people in Sub Saharan Africa each year
with solar electricity.

One year's worth of global fossil fuel subsidies
could comfortably pay off Sub-Saharan Africa's
entire international debt burden with billions
left over.

Under business as usual, global oil use and
economic growth are interdependent. Threats to
oil supply, either in terms of price or simple
availability, mean the global economy going 'cold
turkey'. Once oil production peaks - a point many
analysts believe we are on the cusp of - prices
begin to rise sharply, with the heaviest burden
falling on the poorest countries, while developed
nations are already experiencing fuel price riots

The report shows that subsidies to coal, oil and
gas, measured conservatively at around $235
billion per year directly distort the global
economy and hold back the development of
renewables. The energy industry is further skewed
by the fact that the direct costs of damage by
carbon emission - estimated by the British
government at between £50 and £200 per tonne -
are not factored into the price of fossil fuels.

Andrew Simms, nef Policy Director said, "Around
the world control of fossil fuels is linked to
corruption and violence. Burning them causes
climate change which in turn puts an impossible
obstacle in the way of ending poverty. Reshaping
our energy supply holds the secret to ending
poverty and preventing global warming.
Small-scale renewables remain the best answer for
communities and the environment."

The capital requirements of renewables can also
be lower than those of conventional and
centralized investments. The report highlights
the diversity, flexibility and potential of
renewable energy sources, including:

In India a pilot project in Bhopal, a city still
suffering the after affects of its lethal
chemical encounter with development, is providing
cleaner and cheaper lighting for street vendors
with solar lanterns.

In Kenya, a switch from charcoal to
environmentally friendly briquettes means a
saving of 33 per cent on energy bills.

In Mongolia, small household-scale wind turbines
have added up to US$30-US$150 in income per month.

In Bangladesh, community solar-powered cell
phones have produced up to US$200 per month in
revenue for women who primarily operate the
phones in their homes.

The report calls for the official adoption of key
targets for the uptake of renewable energy
including:

Implement the G8's target of serving at least one
billion people globally with renewable energy by
2010, phase out government subsidies for fossil
fuels and nuclear energy.

Reform the International Financial Institutions
and Export Credit Agencies to dramatically
increase funding for renewable energies in
developing countries. Phase out World Bank Group
subsidies to fossil fuel projects by 2008 in line
with the recommendations of its Extractive
Industries Review.

Increase the target of access to clean energy to
two billion on the world's poorest people over
the next ten years.