Empowered lives. Resilient nations. Energy and Poverty in the Context of Climate Change Background Papers Series 2012/17 Abstract Energy drives development, economic as well as human, with advanced technologies as means to achieve this. The deprivations in energy in terms of quantity as well as quality causes lack of development thereby poverty and human sufferings. This technical paper is an attempt at providing deeper insights into these aspects with a focus on the developing countries of the Asia and the Pacific region. The paper begins with emphasizing the issues of securing energy needs of poor and climate change mitigation emerging as conflicting challenges, and their significance in the Asia-Pacific region in the global context. These challenges are extremely critical in the region because it has the highest energy deprivation among the poor at present and it is fast moving towards emerging as the biggest emitter of CO2 in the future. Further, the linkages between energy, poverty, sustainable development and climate change are analysed by developing different sets of indicators and the results suggested relatively strong association among these. Finally, the possibility of providing universal access to modern energy carriers for the households of the Asia-Pacific is explored by adopting a low-carbon pathway. Key words: Energy Access, Energy Security, Climate Change, Poverty The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNDP, or the UN Member States. This paper was submitted to UNDP Asia-Pacific Regional Centre as a technical background paper to inform the Asia-Pacific Human Development Report, “One Planet to Share”. The data may differ from that finally presented in Asia-Pacific Human Development Report. Readers may contact the author directly for any clarifications, queries on data, inferences, and conclusions or to engage in discussion. This paper has not been copyedited. Peer reviewers: External: Anoja Wickramasinghe UNDP: Anuradha Rajivan, Bishwa Nath Tiwari, Caroline Borchard, Rohini Kohli, Niranjan Sarangi, Omar Siddique, Susan Wong 2 Energy and Poverty in the Context of Climate Change Table Contents…………………………………………………………………..………….. 3 List of Tables……………………………………………………………………..………..... 5 List of Figure……………………………………………………………..………………..... 7 List of Boxes……………………………………………………………..……………….......8 List of Acronyms………………………………………………..………………………....... 9 Definition of Technical Terms………….………………………….…………….………... 12 Executive Summary……………………….…….……………………………….………... 13 3 Table of Contents 1. Introduction ...................................................................................................................... 21 1.1. Objectives and Scope ................................................................................................ 22 1.2. Energy Security of Poor and Climate Change Mitigation: Conflicting Challenges . 24 1.3. Emphasizing the Asia-Pacific Region in the Global Context ................................... 26 1.4. Energy Access – Concept and Definition ................................................................. 29 2. Energy Supply and Consumption in Asia-Pacific: An Overview.................................... 31 3. Energy Access Status and Sources of Energy for Poor ................................................... 37 3.1. Status of Energy Access ............................................................................................ 37 3.2. Sources of Energy for Poor ....................................................................................... 42 3.3. Implications of Household Energy Consumption for Climate Change..................... 43 3.4. Access to Modern Energy Carriers: The Rich-Poor Divide...................................... 50 4. Sources of Energy in the Industrial sector ....................................................................... 51 5. Energy Access, Poverty, Sustainable Development and Climate Change....................... 58 5.1. Expanding Energy Access for Building Empowerment and Resilience ................... 61 5.2. Implications for Economic Development Benefits Reaching the Poor..................... 61 5.3. Implications for Human Development ...................................................................... 63 5.4. Implications for Environmental Development .......................................................... 66 6. Energy development versus Economic, Human and Environmental Developments: An Indicator-based Assessment ..................................................................................................... 69 6.1. A Composite Development Index ............................................................................. 69 6.2. Implications of energy development on the other development indicators – An analysis of relationships ....................................................................................................... 74 7. Energy Access Policies and Programmes ........................................................................ 77 7.1. Large-scale Government Initiatives .......................................................................... 78 7.2. Price Controls: Energy Subsidies and Tax Incentives .............................................. 79 7.3. Promoting Technology Dissemination...................................................................... 80 7.4. NGO and Private Sector Initiated Programmes with Donor Funding and Government Support ............................................................................................................ 81 7.5. Barriers to Expanding Energy Access to the Poor .................................................... 82 8. Universal Energy Access in Asia and the Pacific – The Way Forward........................... 84 8.1. Universal Energy Access Scenarios: Implications for Resources............................. 85 8.2. Universal Energy Access – Implementation Mechanism ......................................... 93 9. Energy Outlook for the Industrial Sector ......................................................................... 95 10. Summary and Conclusion ............................................................................................. 97 Bibliography……………………………………………...…………………………………. 99 4 List of Tables Table 1: Countries selected for analysis and their groupings .................................................. 24 Table 2: Developing Asia-Pacific in the global context – Comparing indicators ................... 28 Table 3: Status of energy production and consumption in 2007 ............................................. 34 Table 4: Final energy consumption and its distribution in 2007 ............................................. 35 Table 5: Energy consumption indicators in 2007 .................................................................... 36 Table 6: Primary energy demand (MTOE) outlook for selected countries and Asia-Pacific region ....................................................................................................................................... 37 Table 7: Status of access to modern energy carriers in 2007................................................... 38 Table 8: Household energy consumption - Share of population using particular fuel for cooking (2007 or latest year) ................................................................................................... 41 Table 9: Population using modern cookstoves for cooking (2007 or latest year) ................... 42 Table 10: Household energy consumption - An indicator of energy development (2005) ..... 44 Table 11: Fuel-wise household energy consumption in 2005 (TJ) .......................................... 45 Table 12: Emission factors for household energy carriers....................................................... 47 Table 13: CO2e emissions from household energy consumption in 2005 ('000 tonne)........... 48 Table 14: Black carbon emissions from household energy consumption in 2005 (tonne) ...... 49 Table 15: Energy access gap between rich and poor ............................................................... 52 Table 16: Industrial energy consumption - An indicator of energy productivity (2007)......... 53 Table 17: Fuel-wise industrial energy consumption in 2007 (TJ) ........................................... 54 Table 18: Emission factors for industrial energy carriers ........................................................ 55 Table 19: CO2e emissions from industrial energy consumption ('000 tonne) ......................... 56 Table 20: Black carbon emissions from industrial energy consumption in 2007 (tonne) ....... 57 Table 21a: Expanding energy access: Implications for economic, human, social and environmental developments ................................................................................................... 59 Table 21b: Energy access has implications for economic, human, social and environmental development ............................................................................................................................. 60 Table 22: Indicators of economic development – Access to economic benefits ..................... 62 Table 23: Indicators of human development – Extent of reach of development benefits ....... 64 Table 24: Indicators of human development - Outcome of development ............................... 65 Table 25: Indicators of contributions to climate change - Carbon emissions (2007) .............. 67 Table