Societies will always need energy to develop and function; how this energy is generated and delivered will determine whether we can achieve a sustainable future. Today, approximately 40% of the world’s population, mostly in low- and middle-income countries, don’t have access to modern sources of energy, instead relying on old-fashioned biomass burning, such as the use of firewood, charcoal, or animal waste, which leads to environmental issues and health problems associated with indoor air quality . Moreover, as these nations undergo further development and industrialization, they will experience increasing energy demands. In order to tackle this double issue of improving access to energy and meeting growing energy needs, there needs to be an adoption of more sustainable energy practices worldwide, which focuses not only on the economics of energy resources but also takes additional critical factors into consideration, namely the impact on the environment, especially on climate change.
What steps must be taken? The problem is two-pronged: the amount of renewable energy generation must be increased, but simultaneously, energy consumption needs to be reduced, including through increased energy efficiency. As energy use in developing countries increases even more rapidly, this growth will provide an opportunity for the deployment of new clean energy sources, as well as the creation of new, more efficient energy infrastructure.
When considering energy alternatives, there are three main aspects that come into play: economic competitiveness, energy security, and environmental impact . Unfortunately, due to the high cost of many sustainable energy technologies, economic competitiveness often takes precedence, especially in areas with limited resources. But since we know that climate change affects us all, we must find a way to a sustainable energy future in both developing and developed nations. How then can we provide low and middle-income countries with the resources to switch to a sustainable energy future? Two crucial factors – financing mechanisms and further technological developments – will be required to make clean energy systems economically competitive with traditional fossil-fuel burning technologies. Financial mechanisms allow for a reduction in some market barriers for new, clean energy technologies by providing investors with less risk and uncertainty when competing with traditional energy sources, while continuous technological development could produce applications that are adapted to local conditions, as well as allow the establishment of new “clean industries” that could provide economic development for these developing countries.
The international community has created a number of financing mechanisms to transfer resources from wealthier countries to developing nations, many of them as a way for developed nations to comply with their own emission reduction targets under the Kyoto Protocol. Examples of such efforts include the Clean Development Mechanism (CDM) and the Joint Implementation (JI) plan, and the program for Reducing Emissions from Deforestation and Forest Degradation (REDD) . However, these programs depend on a carbon market to fix the price of carbon emissions, which has not yet been a successful model due to the volatility in the price of carbon in the market’s current implementation, and in recent years the price has been too low to encourage investment in clean technologies via these types of mechanisms. Moreover, these mechanisms have suffered from a range of shortfalls and criticisms, ranging from fraudulent project approvals, unintended harmful consequences to the environment, and failure to consult local communities and indigenous populations most affected by the financed projects [4,5]. Because of these flaws, these programs have yet to succeed in facilitating the widespread implementation of truly sustainable energy development, but ongoing changes to these programs might help address some of these issues.
At a national or local level, there are many models being used around the world to encourage the deployment of clean energy technologies, many of which have high upfront capital costs and are not yet price competitive with conventional fossil fuel technologies, and so provide less of an incentive for the private sector to invest [6,7]. Some of these models reduce the high capital associated with implementing sustainable energy projects, while others increase the benefits received from sales of clean energy. We could call the first ones “supply incentives” and the second category “demand incentives”. Supply incentives may come in the form of subsidies, grants, or tax breaks that benefit the installation of renewable energy technologies, whereas demand incentives ensure a premium payment for the energy that comes from cleaner energy sources. The most commonly used form of the latter is a Feed-in Tariff (FIT), which contractually guarantees a price for the energy proportional to its cost of production . Another interesting model, which has proven successful in many developed countries and has also been implemented in developing countries with the aid of the World Bank, are Energy Service Companies or ESCOs. These companies are contracted to energy users to identify energy savings projects, and are then paid from the energy savings that come from the financed projects. Countries that have implemented this model include Brazil, China, India, Thailand, Turkey, Uruguay, and Vietnam .
Another critical issue in most nations is the case of misplaced subsidies, where the government subsidizes fossil fuels in an attempt to reduce the economic burden of international prices. These subsidies make it even harder for renewable technologies to compete. Reallocation of subsidies to cleaner sources of energy would allow an easier adoption of these technologies instead of perpetuating the consumption of fossil fuels.
It is worth mentioning that renewable technologies may be more easily implemented in rural “off-grid” areas. In these locations, the lack of infrastructure for conventional energy sources may make it more cost-effective to install local renewable energy systems . An interesting example of this is found in the African country of Senegal, which chose to seek alternatives to diversify their energy supply, exploring the possible addition of renewable energy into their energy portfolio, ways to encourage an increased share of energy produced from renewable sources, and feed-in-tariffs both for off-grid solar and wind  . Examples of these projects include small-scale solar photovoltaics aimed at providing a regional supply of energy to charge cellphones, solar lamps to phase out kerosene lamps, small solar ovens to provide an alternative for cooking, or in regions more abundant in water resources, micro-hydro electricity generation projects.
In addition to meeting energy demands in growing economies, the implementation of new technologies itself has the potential to increase the a country’s economic development, as new industries are created and with them new jobs, while facilitating domestic innovation and technological advances [1,10]. Moreover, improved access to sustainable sources of energy could promote social development, for example through the empowerment of women by freeing them from the laborious task of accruing traditional sources such as firewood .
It is clear that no single approach will allow the switch from cheaper conventional energy technologies to cleaner and more sustainable ones in developing countries, yet with international coordination, government policies to level the playing field for renewable energy, and participation of the private sector, it is possible to foresee a future for sustainable energy in the developing world. Which strategy should be adopted to aid the implementation of sustainable energy would likely vary from country to country, as their fiscal, social and geographical conditions may favor different means, but the important thing is that they start developing these policies now.
We must also recognize that today’s developed nations industrialized in an unsustainable way and therefore have an important role in aiding the deployment of renewables in currently developing countries. The transfer of resources, funds, and technological knowledge from developed countries is a crucial part of sustainable energy deployment in the developing world, and must be a collaboration involving research, business, venture capital, and government organization in both groups of countries . A great example of this is the US-China Clean Energy Research Centre (CERC) (http://www.us-china-cerc.org/). This approach of technological and financial transfer may be the most promising in promoting sustainable energy, and could allow both developed and developing countries to find common ground in balancing environmental protection mutual socioeconomic development.
Nicolas Westenenk is a recent MPhil graduate in Engineering for Sustainable Development from the University of Cambridge
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