Energy and sustainable development

Article, 30 September 2008

The world is facing an energy crisis with major global and local implications. Energy issues need to be addressed holistically, based on integrated models and approaches and involving multiple stakeholders. IIED's work on energy currently focuses on two key areas: governance of large-scale energy sector development (oil, gas, biofuels); and models for delivery of sustainable decentralised energy services.

Fluctuating oil prices and concerns about peak oil and energy security have implications not only for Western consumers, but also for millions of people in low-income countries who rely on oil-based agricultural inputs, transportation, diesel-powered generators and kerosene lamps.

For the world’s poorest, access to sustainable, healthy sources of energy remains a basic critical need. About 2.4 billion people lack access to clean, safe cooking fuel, while 1.6 billion people have no access to electricity. Collecting fuel is time-consuming, while unsustainable use of fuelwood depletes natural resources and inefficient burning exposes people to smoke-related respiratory illnesses. Vast renewable energy resources (wind, solar, hydropower) are available but under-exploited in some of the poorest countries. Government energy policies need to recognise and support decentralised options for poor consumers.

Emerging economies (e.g. China and India) are making strides in sustainable energy innovation – and this experience needs to be captured. Decentralised energy models developed in these countries and in the West may have value for developing countries, by ‘leap-frogging’ older grid-based models. Technology transfer, however, is not a straightforward matter. Effective decentralised energy models require partnerships and dialogue between government, industry, donors, civil society and local consumers. They may require investment in capacity building and awareness-raising; strategic capital inputs from donors; or targeted government subsidies. Carbon finance is increasingly playing a role.

Despite intensified searches for sustainable alternatives, oil and gas exploration and production continue – in increasingly sensitive environments. Many oil-producing countries suffer from the ‘resource curse’, where an abundance of natural resources undermines economic growth, for example through corruption or mismanagement of revenues. Some international energy companies are leaders in corporate social responsibility (CSR), yet good environmental and social policies do not guarantee effective governance of supply chains. Eighty per cent of oil and gas development is undertaken by state companies, who may not subscribe to international good practice standards and are frequently not held to account by civil society. Energy companies are increasingly looking towards large-scale biofuel production as an alternative to oil and gas, raising further issues of land-use conflict and food security.

Energy, ecosystems and livelihoods are interdependent: there are close links between energy, agriculture and water provision. Energy issues need to be addressed holistically, and by engaging multiple stakeholders in dialogue. Major energy players should not think of themselves as isolated from overall environment and development issues in their regions of operations. Our thinking around energy increasingly needs to be based on integrated models and approaches.

Our energy-related research currently focuses on two key areas:

  • Governance of large-scale energy sector development (oil, gas, biofuels)
  • Models for delivery of sustainable decentralized energy services

We are working on the following projects:

  • Sustainable utilisation of Nigeria's gas and renewable energy resources (SUNGAS)
  • Direct investment in the extractive industries

Read our new publication

Access to Sustainable Energy: What role for international oil and gas companies? Focus on Nigeria

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