Goh Sui Noi, Straits Times 12 Nov 09;
FOR the 200 residents of the remote Indian village of Kattehole in Karnataka state, life became literally brighter last year. Until then, the villagers, who did not have access to electricity, relied on kerosene-burning lamps that produced black, unhealthy soot. Bedtime was 7.30pm or 8pm simply because the lighting was too poor for them to do much else.
Then, in the middle of last year, a group of technicians from solar lighting company Selco came to demonstrate what their systems could do for the villagers. They were duly impressed but could not afford the initial cash outlay for the system, which cost 12,000 rupees (S$358) for a two-light system.
So, Selco helped 15 families secure loans with a rural bank, reported the Financial Times. Vegetable farmer Boralingaiaha, 41, will repay 250 rupees a month over four years for his two-light system, much less than the 100 rupees a week he forked out previously for five litres of kerosene. Now, children in Kattehole can study till 10pm.
Selco's solar lighting system brings good, clean lighting to remote areas that electricity grids do not reach - and more cheaply and efficiently to areas the grids do reach. In India, where disruptive power cuts can happen often, solar energy provides more reliable lighting.
Selco, founded by 39-year-old social entrepreneur Harish Hande, demonstrates that going green need not conflict with development and poverty alleviation. Started in 1995, the company has sold solar lighting systems to more than 95,000 village homes. It broke even in 2001 and made a profit every year thereafter until 2005, when a shortage of solar cells led to a spike in their prices. The company has secured new funding and hopes to be in the black within two years.
On a much larger scale, Lighting Africa, a World Bank Group initiative, aims to provide clean, affordable and efficient lighting products and services to 250 million sub-Saharan Africans by 2030. Many households and small businesses on the continent have no access to electricity grids. Like the Kattehole farmers, they rely on fuel-based sources such as kerosene lamps. Lighting is often the most expensive expenditure item for households, taking up 10 per cent to 15 per cent of their income.
Lighting Africa works with the private sector to develop products based on efficient lighting technologies such as light-emitting diodes, or LEDs, using renewable energy such as solar power.
Developing nations in Africa and Asia are well-placed to take a low-carbon growth path and alleviate poverty through sustainable means. Lacking in the polluting conventional power infrastructure of developed nations, they can start on a relatively clean slate. They can leapfrog old high-carbon technology and use green technologies. What they lack is funds to do so.
Mr Richie Ahuja, the India programme manager for the United States-based non-profit organisation Environmental Defence Fund, estimated that developing nations would need US$200 billion (S$277 billion) to US$500 billion annually to combat climate change. He further pointed out that while 15 per cent of global capital flows were public, the remaining 85 per cent were private. Clearly, the private sector has a huge role to play in funding projects to mitigate climate change.
And, as it had been pointed out, markets are created by public policy. Said WWF International director-general James Leape: 'Government policy on fossil fuels is making them cheaper than they may be.'
For example, energy subsidies are meant to bring social benefits, but subsidies can lead to wastage. Subsidising carbon-emitting fossil fuels encourages their use. A study by the International Energy Agency in 2006 showed that in the 20 largest non-OECD (Organisation for Economic Cooperation and Development) countries, subsidies of fossil fuels made up US$170 billion of a total of US$220 billion in energy subsidies in 2005.
Energy subsidies reform should be undertaken so that subsidies enhance access to sustainable energy sources or have a positive impact on the environment, the United Nations Environment Programme has urged.
Such a reform would not only move public funds to projects that mitigate climate change, but also help unleash private funds in the same direction. This is because subsidies would make renewables profitable. In Denmark, where wind power is subsidised, nearly 20 per cent of its power is generated through wind turbines. A wind turbine industry has flourished, with Danish makers exporting 90 per cent of their products and accounting for half of the world's wind turbines.
What would really drive private-sector investments in green technologies would be the adoption of binding caps on carbon emissions by developed nations. Said Mr Ahuja: 'I believe this will unleash incredible amounts of capital for innovation, both product and process innovation, that will support climate- friendly development in both the developed and developing economies.'
Caps would effectively put a price on carbon and force companies to look for energy-efficient and clean technology solutions. Moreover, poor countries, with their low carbon emissions - an average of 1.6 tonnes per capita against 16 tonnes per capita for developed nations - can sell their carbon credits to rich countries and use the earnings to pay for their low-carbon solutions.
