Reducing energy poverty

In Asia, households without access to electricity use non-conventional biomass, whose effects on public health and the environment have been mentioned. Hence, reducing energy poverty would have a positive effect on the environment by reducing the use of biomass: when a household has access to electricity, its first use is for lighting, and thus it reduces the use of kerosene or biomass. The Indian government has recently started tackling the problem of providing improved electricity access to the entire country. In 2005, the electrification rate was 62 per cent, though the number of people using biomass as cooking and heating fuel has increased in the past few years. The Electricity Act of 2003 forces Indian utilities companies to supply electricity everywhere, including to villages. But, electricity does not simply replace biomass and a unique and single transition process does not exist. Each country or even region has its own procedures. To shift from traditional biomass to modern energy three components are needed: availability, affordability and cultural preference. Indeed, biomass is often seen as free and readily available, and even if it is bought it will probably be cheaper than any of the other energy sources.

Concerning traditions, Indian households, even those that are rich, still use their biomass stoves to prepare their traditional bread. Therefore, strategies other than the electrification of the country must be pursued, such as upgrading kitchen ventilation and the efficiency of biomass cooking stoves in poor households. Indeed, whereas biomass cooking stoves using dung offer an 8 per cent energy efficiency and 9 per cent using wood fuel, coal and charcoal cooking stoves have 25 per cent energy efficiency and those using natural gas, kerosene or LPG reach 50-60 per cent. In China, electrification has been a great success and the electrification rate reached 99 per cent in 2005.10 In the 1980s the Chinese government took supportive measures with the creation, for example, of local firms and basic infrastructure. This has helped to alleviate poverty and increase human welfare. However, rural households still use biomass for cooking purposes as clean fuels are not affordable and widespread in rural areas and thus still constitutes a heavy environmental burden. Therefore, there is also a need for action in China, through off-grid renewables and solar and biogas thermal technologies that are being promoted by the Eleventh Five-Year Plan. Historically, fossil fuels such as oil and coal have been heavily subsidised. This has distorted the market and increased the quantity of oil and, above all, coal consumed. Reducing subsidies makes it possible to reduce the incentive to consume polluting sources of energy. In any case, subsidies have not always achieved their primary goals. For example, the subsidies on kerosene and liquefied petroleum gas (LPG) in India were intended for the poor, in order to make them consume less biomass. However, it has been shown that 40 per cent of the subsidies benefited the richest 7 per cent of the population.

The Committee on Pricing and Taxation of Petroleum Products announced that limiting this scheme only to households living under the poverty line would cut down by 40 per cent the quantity of subsidised kerosene consumed. Other policies are needed in India to enable a change from biomass to cleaner cooking fuels in the poorest households and new schemes are being implemented. One example is the Deepam LPG scheme that subsidises the technology but not the fuel. Indeed, the state government of Andhra Pradesh provides a free LPG connection but does not offer any subsidy for fuel refill. Lastly, it should be noted that as developed countries, both South Korea and Japan have binding commitments concerning carbon emissions, thanks to the Kyoto Protocol. Therefore, ‘new' market instruments such as joint implementation, clean development mechanisms and the carbon trading scheme will be available for them to reduce their emissions. As electricity generation is one of the greatest emissions culprits, technology will play a central role in environmental preservation. Indeed, clean coal technologies will be able to reduce emissions of carbon dioxide, sulphur dioxide, nitrogen dioxide and dust. Carbon capture and storage (CCS), now available, can currently capture 85 per cent of the CO2 that would otherwise have been emitted. However, they reduce power plant efficiency by 8-12 per cent.

The current price of such a technology is quite high but it is expected to decrease to less than $25 per tonne of CO2 by 2030. New technologies will be able to increase thermal efficiency. By using critical or super-critical coal-fired power plants, Asian countries would significantly increase their efficiency and thus reduce their emissions. Therefore, this issue is extremely important in China and India as they are and will continue to be heavy coal users. According to the IEA, if Chinese and Indian coal power plants were to reach the efficiency of OECD plants that would provide, in 2030, a decrease in CO2 emissions of 650 Mt, which would represent 2 per cent of the global emissions of that year. These two types of technologies (super-critical power plants and CCS) can be coupled and will have a great role to play in combating global warming. One can see the gains that would be achieved by upgrading current Chinese and Indian coal-fired power plants to the level of OECD plants, for example, both in terms of CO2 emissions and efficiency. International cooperation will be more and more required to facilitate the deployment of such technologies in developed as well as developing countries. For example, in 2006, the Asia-Pacific Partnership on Clean Development and Climate was launched by Australia, Japan, South Korea, the United States, China and India. Further cooperation takes place through the Asia-Pacific Economic Cooperation and the East Asia summit. There is also bilateral cooperation between the United States and China and India where carbon sequestration and the use of clean coal technologies in the power sector are becoming important. The European Union has also launched programmes with China for a more sustainable use of energy and with India focusing on clean coal technologies and clean development mechanisms (CDM).

In addition to this kind of cooperation, China and India are the largest markets for CDM projects. China alone represents half of the CDM projects undertaken worldwide and has developed expertise in identifying and designing CDM projects. A law on ‘Measures for Operation and Management of the Clean Development Mechanisms Projects' has also been ratified to set priorities and establish general conditions. As for India, it is already the second CDM market and 75 per cent of total savings take place in energy-related projects. Therefore, China and India will be the stage for technological improvements either through cooperation or with CDM projects.

Reducing energy poverty

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