UNIT 5 THE NORTH-SOUTH DEBATE

Structure
5.1 Introduction
Objectives
5.2 Issues and Concerns
Disparities in Energy Production and Consumption
Energy and the Environment
Other Issues
5.3 Addressing the Issues
Energy Availability and Access
Equity
5.4 Summary
5.5 Terminal Questions

5.1 INTRODUCTION
So far you have studied about some common concerns related to energy and
environment, such as the energy consumption patterns, the impact of energy use and
energy production technologies on the environment. You need to understand that
these concerns are not purely technical in nature. We have to consider the social,
political and economic aspects as well. For example, you have studied in Unit 2 that
the consumption of energy is not uniform throughout the world. But energy use can
have a global impact and its mitigation requires the same measures from the
developed and developing countries. This is an unequal situation that could place the
developing countries at a great disadvantage if they are not vigilant enough.
You have studied about some dimensions of the North-South divide in the course
MED-002. It impacts the energy-environment relationship as well. The disparity in the
energy consumption between the North and the South, and the impact of
environmental agreements on developing economies are of concern to us as they can
influence the course of our development. What is the perspective of developing
countries on contentious issues related to energy and the environment? How best can
we meet these challenges? What is the Indian response? These are the concerns that
we address in the last unit of this block.
Objectives
After studying this unit, you should be able to:.

discuss the major issues and concerns in the North-South debate on energy and
environment;
analyse the perspective of developing countries, in general, and India, in
particular, in the energy-environment debates; and
outline the ways in which the concerns of developing countries can be addressed.

5.2 ISSUES AND CONCERNS

Energy has a long history. Before people could read and write, fire was discovered
and used for cooking, heating and scaring wild animals away. Fire was possibly
civilisation's first great energy invention, and wood was the main fuel for a long time.
The Industrial Revolution changed the energy situation considerably. It not only
increased dramatically the energy options available to humanity for development but
also paved the way for disparity and inequity in future energy production and use.
Energy and Environment: Energy is now a critical input and a major constraint in development. Commercial
Current Concerns energy shortages in the wake of the first oil price adjustment in the early 1970s have
hindered the pace of development of poor countries. The continued dependence on the
rapidly dwindling non-commercial biomass resources of firewood, crop waste and
manure has hit the rural poor in the developing countries the hardest. Can you
visualise what the lack of modem energy services means for the poor in their daily
lives? It makes their poverty worse and it makes escaping poverty more difficult.

The challenge today is to improve energy availability and access to modern

energy services for poor countries and for poor people. This has to be done in
ways that are financially sustainable and affordable, that address energy security
concerns, and minimise local and global environmental damage. These issues have
resulted in serious debates between the developed and developing countries about the
policies and mechanisms required to meet the growing energy needs of the people in a
sustainable and equitable manner.
Developing countries are, in fact, expressing strong and growing concern at what they
see as a highly unfair and biased focus on their environmental problems, while little is
done to address major environmental challenges in the industrialised countries. In this
section, we outline the contours of the North-South debate in the energy sector. Such a
debate has to take into account the socio-cultural and economic variables of the
developed and developing countries, their relationship to the existing and desired
patterns of energy consumption, environmental constraints in the developing
countries, and, above all, the needs and priorities of the people as they see them.

5.2.1 Disparities in Energy Production and Consumption

Energy scenarios in the developed and developing countries reveal sharp disparities
between the energy production and consumption patterns of these countries, as
well as between the rural and urban areas within the developing countries.
If the per capita energy consumption in the developing world were to reach only 50%
of that consumed by the citizens of industrialised nations, and if everyone in the
prosperous industrialised nations were to scale their resource use down to the same
level, energy production worldwide would still have to double. To try to prevent
this process is to impinge on the sovereignty of nations, slowing their progress
towards prosperity.
Can we increase the global energy production to more than double in the next twenty
years in a way that is clean and sustainable? Even with highly efficient energy usage
and conservation worldwide, this is what it is going to take for all the countries of the
world to stay on the course of increasing prosperity. Can "non-h;dro renewable
sources" provide this much energy? Maybe, but it would take a transi~rmationin the
world energy infrastructure of unimaginable speed and scope. We can hope that such
a thing will happen with technological innovation, solid business plans, and arguments
between the North and South that rely on reason along with passion.
As far as energy consumption is concerned, you have learnt in Unit 2 that the total
energy (in all forms) produced and used, GHG emissions, COz emissions as well as
per capita energy consumption is much lower in the developing countries than in the
industrialised countries. However, in future, the relative portion of energy
consumption and thus the carbon dioxide emissions of the developing countries are
bound to increase further as they develop.
The Western way of life, style of economy and way of using natural resources has a
direct impact on the complex ecosystem of the Earth. Responsibility and danger,
however, are not shared equally among the nations and regions of the Earth. The
global pattern of distribution of energy consumption and thus the responsibility for the
anthropogenic carbon dioxide emissions shows huge inequalities. For example, in the
year 2000, the share of developed countries in total GHG emissions was 56% and in
 C 0 2 emissions it was 7 1%. COz emissions rose by 8% from 1990 to 2000 and from The North-South Debate
energy supply industries, they rose by 14%. Consequently, the environmental impact
of energy use and production technologies due to developed countries is far more
significant compared to the developing world. You may like to revisit the information
and record it here. Do this exercise before studying further.

SAQ 1
Complete the table below for any one year in the recent past. Refer to data given in
earlier units.

Countries Total Share in Energy Share in CO2

Energy GHG Consumption emissions
I
Production emissions per capita I

~ FoY;:rEd
Developing
countries
India

What conclusions do you draw?

Fig.S.l: There are glaring disparities in energy consumption between the developed and developing
countries and between the rich and the poor sections within the developing countries.
, Women in many rural areas of India have to walk tens of kilometres in a single day to
fetch water for household uses

A point to note is that a dichotomy exists within the developing countries as well:
Between tl.c urban and rural areas, and between the rural rich and rural poor. A
major proportion of the total "commercial energy'"is consumed in the urban and
industrial sectors, and for transportation. The agricultural and the rural sector in the
developing countries, which support more than 70% of the world's population, get a
relatively small share of the available commercial energy.
In South Asian countries, for example, agriculture contributes a significant share to
I the national income and provides employment for more than half the workforce. But,
it usually gets 5 to 10% of the total commercial energy in these countries. The scarcity
of commercial energy for rural development hinders the growth of other income-
generating activities in rural areas (such as agro and other rural industries). This, in
turn, affects the opportunities for providing employment to the growing labour force,
and stemming large scale rurallurban migration.
Energy and Environment: Moreover, a major proportion of the total energy consumed in many developing
Current Concerns countries continues to be provided by "non-commercial" energy sources - firewood,
manure draught and pack animals and agricultural wastes which are mostly utilised in
the rural areas. Energy in rural areas is used mainly for household consumption and
produced from these "non-commercial" energy sources secured by private efforts at
almost zero private cost.
A predominant argument in this debate is that energy is used inefficiently both in
urban and rural areas in developing countries, with the result that the per unit
consumption of energy is much higher than the per unit increase in national gross
domestic product. And, the inefficient use of energy has a negative environmental
impact, though it has yet to be assessed.

5.2.2 Energy and the Environment

In Unit 4, you have studied how the energy sector is affecting the environment and the
global climate. There is rising anxiety around the world about climate change and
global warming. Climate change is a serious, emerging threat to the stability of the
Earth's ecosystems, and a particular hazard to the world's poorest people. The threat
of climate change also brings more urgency to the need to reorient energy- related
investments, using them to provide abundant, clean, safe energy for human needs and
sustainable livelihoods.
Industrial pollutants It is now well known that unsustainable consumption patterns of the rich
are responsible for
global warming industrialised nations are responsible for the threat of climate change. Only 25% of
the global population lives in these countries, but they emit more than 70 percent of
Interestingly, even the the total global C 0 2 emissions and consume 75 to 80 percent of many of the other
International agreements can resources of the world. In per capita terms, the disparities are also large. For example,
work at cross purposes. The an Indian citizen emits less than 0.25 tons of carbon per year whereas a citizen of the
Ozone convention's solution USA emits more than 5.5 tons. India's carbon dioxide emissions are projected to
was to switch from CFCs to increase fourfold compared to 1986, but even then would be only 0.36 tons per capita
HFCs ( hydrofluorocarbons).
But this became a problem for
below the world average of 1.2 tons per capita in 1986. To accommodate even a
the Climate Change modest rise of emissions by only India and China, the developed countries would have
Convention as HFCs are very to reduce their GHG emissions by 30% by 2025, to keep global emissions in 2025 at
powerful greenhouse gases the same level as in 1986.
that lead to global warming!
For most developing countries, a central element of the climate debate revolves
around the need for a fair resolution of contentious questions such as how are the
emissions estimated and who should reduce GHG emissions and by how much,
how these reductions will be achieved, and how the burden of impacts,
adaptation, and mitigation will be shared. For example, there is a lack of reliability
of GHG emission estimates, particularly of methane. According to initial estimates,
large emissions of methane from paddy fields were ascribed to developing countries.
However, the empirical basis of these estimates was questioned; subsequently
experimental measurements by Indian researchers showed these doubts to be well-
founded. Moreover, there are questions like: Should emissions by poor who live on
the margin of subsistence be counted on par with the industrial emissions when
ascribing responsibilities for emission reduction?
Fig.5.3: HFCs are Two major international agreements, the United Nations Framework Convention on
environmentally
destructive
Climate Change (UNFCCC) in 1992 and the Kyoto Protocol in 1997 attempt to
chemicals and are address these questions. The Kyoto Protocol requires countries to cut emissions of
therefore obsolete carbon dioxide and other greenhouse gases.
Source for cartoon:
archive.greenpeace.org/ozone/ Some 141 countries, accounting for 55% of greenhouse gas emissions, have ratified
hfcs the Kyoto Protocol, which came into force on February 16, 2005. It pledges to cut
these emissions by 5.2% during the first implementation period between 2008 and
2012. Each country has been set its own individual targets according to its pollution
levels. Large developing countries including India, China and Brazil are not required The North-South Debate
to meet specific targets for now.
Different positions within the political debate on climate change can be demonstrated
by the different responses to the Kyoto Protocol.
The European Union countries, together with a number of OECD countries, are
implementing measures to transform their economies to substantially reduce their
dependence on fossil fuels as an energy source.
The United States of America, the world's largest emitter of greenhouse gases in
fossil fuel consumption, has not ratified Kyoto Protocol. It cites the potentially
adverse impact on its economy and competitiveness as the reason. In addition, the lack
of hard targets for the developing world in the Protocol is unacceptable to it. Australia
has also not ratified it for largely the same reasons. However, the U.S. is the biggest
polluter and its involvement is clearly very important. It cannot be ignored by the
negotiating parties since it emits around 23 percent of greenhouse gases. While it is an
important part of the problem, it is also an important part of the solution. It has the
advanced economy with the technology able to avert the threat posed by climate
change.
But even for countries that have signed it, meeting the goals of the Kyoto Protocol
could be difficult. For example, Canada, one of the treaty's first signatories, has no
clear plan for reaching its target emission cuts. Far from cutting back, its emissions
have increased by 20% since 1990. And Japan is also unsure if it will be able to meet
its legal requirement to slash emissions by 6% from 1990 levels by 2012.
The decrease of the C 0 2 emissions in Europe has been caused by short term factors:
The dropping of industrial production all over Europe, the reduced energy
consumption in East Germany and the closing down of British coal mines. In the
coming years, a new rise in the COz emissions is expected. A report of the European
commission confirms that hardly any EU-member state has taken serious measures to
protect the climate.
It turns out that the industrialised countries, whose contribution to greenhouse gas
emissions is far more due to their unsustainable modes of production and
consumption, are attempting to further delay the process and preserve their lifestyles
to the detriment of the global environment. Ironically, the mechanisms for meeting the
challenge of global warming have emerged from the developed countries. Let us see
what these are.
The Kyoto Protocol specifies three flexible mechanisms to help meet the challenge of
combating climate change:

Clean Development Mechanism (CDM),

Joint Implementation activities (JI), and
Emissions Trading.
The CDM is a system that would give industrialised countries credit for
financing technologies in developing countries aimed at reducing emissions. It
presents an opportunity to make real greenhouse gas emission reductions, and
provides a mechanism for technology transfer to promote sustainable development in
developing countries. CDMs have both advantages and. limitations as outlined in the
box on the next page.

To date JI projects undertaken in the Kyoto Protocol have focused on the forestry
Fig.5.4: Is the role of
sector. Forests as you know act as carbon sinks: As trees grow, they absorb developing countries
carbon dioxide from the air and transform it into carbohydrates, the storehouse limited to that of
of carbon. About 50% of the dry weight of a tree is carbon. carbon sequestration
sinks?
Afforestation of previously cleared land can markedly increase the total carbon stored
In the land and provide carbon credits for trading to offset the emissions of
Energy and Environment: greenhouse gases. The intention is that credits will be certified and recognised by a
Current Concerns certificate owned by individuals or companies who have created the storing of the
greenhouse gas. These certificates could then be sold to industry wanting to reduce
their greenhouse gas emissions. Thus, developed countries could fund such projects to
meet the Kyoto emission reduction targets.

Advantages of Clean Development Mechanism

The proposal to grant emission credits gives developed countries (committed to

emission reductions) an incentive for partnership with developing countries, by
way of technological changes or technology transfer, to promote sustainable
development in developing countries. It also enables these countries to work
together in JI activities to reduce emissions through projects consistent with local
development needs.

It could generate practical experience with the exchange of emission credits on an

international basis and create confidence in the role of flexibility mechanisms in
the reduction of emissions in a cost-effective manner.

It could assist in arranging funding of certified project activities, while helping

address the issues of global climate change through a market-based concept.

It may result in certified emission reductions achieved through individual projects,

which reduce greenhouse gas emissions beyond what would have been achieved
in the absence of the project.

I Limitations of Clean Development Mechanism

A developed country buying another country's emissions could hinder the

developing country from developing economically and socially. Emissions
trading is more geared to benefit the technological and environmental
markets, which are largely dominated by developed countries. The developed
countries not only benefit from the emission credits, but also from the financial
returns of their investments. Developing countries stand to be net losers in
such a situation, because they will be immersed in a vast marketing
mechanism, the long-term implications of which are difficult to grasp at
present; they will also be excluded from the distribution of emission credits.

The trading of emissions still does not solve the problem of reducing the
developed country's emissions. It allows them to comply with the Protocol
without making any real reductions in GHGs. It does not influence companies to
invest in clean technologies, such as solar and wind. This may be detrimental to
the environment as a whole.

It could give the industrialised countries emission credits for projects that they
were already planning, or worse, for projects that might be environmentally
destructive. The cheapest project to fund is one that would have happened anyway
and at no additional costs. Developing countries might take advantage of this as
long as they get additional resources. If the market were to be flooded with bogus
and cheap credits, then legitimate projects would be crowded out. The price of
credits would fall and the total resource transfers that the CDM might have
otherwise generated would diminish.

However, the choice of this sector suggests that the role of developing countries is
limited to that of carbon sequestration sinks. The question is: Does this role correlate
with their developmental priorities? Whether it is a question of Joint Implementation
or emission credits, the choice of sector is of the utmost importance. One must take
into account not only the developmental priorities of the
potential for emission reduction or COz limitation which
 terms, as well as the potential impact on the country's economic and social The North-South Debate
development. Any investment made within this framework must situate itself within
the perspective of sustainable development and the fight against poverty.
Further, forestry projects have many limitations in addressing the problems of
sequestration of energy, since they demand a long period of growth and are dependent
on rainfall conditions and the modes of energy consumption of a country. Recurring
costs related to the preservation of forests, which can impact their sustainability, are
not usually accounted for in these projects, nor are the political uncertainties and
reforms which the sector may undergo. Moreover, large-scale planting of fast growing
exotic species may result in the destruction of old forest ecosystems and severe
biodiversity loss.

The ongoing debates on Kyoto Protocol revolve around many controversies and
conflicting evaluations, particularly with regard to:

The risk of diverting North-South Joint Implementation towards increasingly

profitable private investment, on the basis of irrelevant projects, created to some
extent to gain emission credits.

The definition of analytical limits or temporal horizons (deadlines) which can lead
to the over- or under-evaluation of the impact of certain projects in terms of
emission reductions.

Accounting for the existing efforts of developing countries in order to arrive at an

equal partition of emission credits amongst the partners?

A tradeable emission quotas system is recognised as economically efficient in

allocating resources to the reduction of C 0 2emissions. 'Debtor' (read developed)
countries who find it costly to reduce C 0 2 emissions will transfer resources to
'creditor' (read developing) countries by purchasing emission rights. Creditors can
then use these resources according to their own priorities. This is currently seen as the
best option in international negotiations.
However, until such an international system is in place, there are possibilities for
developed countries to invest in developing countries in projects to reduce C 0 2
emissions and claim credit for the reductions. This may be a second-best solution
from the viewpoint of the creditor countries. It lacks the flexibility of the tradeable
quota system because the transfer of resources from debtors to creditors is restricted to
emission-reducing investment. Funds may not be directed towards the environmental
, priority of the choice of creditors (e.g., drinking water and sanitation).
The lesson to be learnt is: The development of any mechanism requires that
rigorous, reliable and equitable procedures of evaluation be defined, and
transparent procedures of control and verification be initiated.
The efforts of developing countries could turn to their disadvantage if the potentials
for low-cost emission reduction which are available to these countries are used by
developed countries for their own benefit. Developing countries will then have to
support higher-costing measures to reduce emissions. This is why it makes sense for
these countries to defend their own commitments, the concept of equity, and the fight
against poverty.
Ultimately, the only way to make the Kyoto Protocol an effective vehicle for clean
development and global climate protection is to restrict all projects undertaken in the
Protocol to renewable energy technologies. These technologies should be specified in
a list that is made part of the rules. Technologies and practices that are not on this
list - such as sinks, 'clean coal' and nuclear power - would not be eligible for CDM
or emission trading credits.
It is important to note that the reduction or limitation of emissions should in no
way constitute a brake on the development of developing countries:it should
Energy and Environment: instead be regarded as an opportunity for them to rethink their development. The
Current Concerns developed countries, considering their historic and actual responsibilities in producing
emissions must remain at the forefront of the fight against climate change, and must
show that they are capable of curbing the cultural and technological model they
present to the rest of the world.

Kyoto is only a first step and much hard work needs to be done to fight global
warming.
India's position

From India's perspective, its fossil-based carbon emissions were only 115 million tons
in 1985 compared to 5.4 billion tons for the world and 1.3 billion tons for the USA.
Even in 2025, its total emissions are likely to be only 0.6 billion tons - a per capita
emission of 0.36 tons compared to a world average of 1.2 tons per capita. These
emissions would not be a problem if the developed countries' present and past use of
fossil fuels had not resulted in an excessive build-up of C 0 2 in the atmosphere.
India has to tackle basic problems of health and nutrition and needs to work on basic
environmental problems such as increasing access to safe drinking water and
sanitation and reducing the use of bio-fuels which harm the health of women and
children. Under the Polluter Pays principle, those above the world average should pay
money to those below the world average.

India's main energy resource is coal. With the threat of climate change, India is being
called upon to change its energy strategy based on coal, its most abundant resource,
and to use other energy sources (e.g. oil, gas, renewables and nuclear energy) instead.
These are expensive options. We should have more freedom to decide which type of
energy we use, how we generate power, how we reduce methane emissions by
agricultural practices or forestry and so on. An immediate concern for India is to come
up with a better negotiation strategy to garner a better deal for its citizens. These
negotiations should also serve as a means to reduce or postpone future vulnerability
by getting the developed countries to reduce their emissions.

Needless to say, India has been pursuing GHG friendly policies in its own interest to
minimise energy consumption - particularly oil consumption - and to deal with its
environmental problems. Efforts are being made by the Government as well as by the
people to reduce energy consumption. 1hese include

Energy conservation and pollution control programmes;

Wasteland development, afforestation;
Promotion of renewable energy sources;
Economic measures such as pricing reforms, removal of subsidy, etc.; and
Fuel substitution policies.

5.2.3 Other Issues

Energy subsidies, energy and global security and the impact of liberalisation are some
other important issues in the North-South debate.
Energy Subsidies
Another point of debate centres on energy subsidies. In the liberalisation regime, it is
expected that the developing countries will reduce the subsidies in the energy sector.
This sector has traditionally seen high and varied level of subsidies in developing
countries, particularly in India. These countries have acted under a constant pressure
from the current GATT, WTO regime: The Indian government has taken steps
towards removing price controls on oil and coal and lowering subsidies to energy
generally. Coal prices were deregulated in the year 2000 and hence direct subsidies
either to the consumers or producers are non-existent now. However, due to subsidies The North-South Debate
on rail transportation, delivered coal prices remain below the market prices.
In April 2002, subsidies on all oil products were removed barring Liquid Petroleum
Gas (LPG) and kerosene, which are mainly used by households. Electricity in India is
highly subsidised and forms the lion's share of the total subsidies allocated to the
energy sector. These subsidies have created price distortions and have led to over-
utilisation of certain resources due to under-pricing. Dismantling energy subsidies
is now on the national energy policy agenda and attempts are being made to
rationalise power subsidies.

However, paradoxically, substantial subsidies to the energy and transport sector

exist in the industrialised countries. Although exact estimates are quite difficult -
single assumptions can add up to tens of billions of dollars to the total - research
suggests that the energy sector receives annual subsidies of about $70 billion per year
while road transport receives subsidies of about $550 billion per year. These
subsidies have a direct and significant influence on the consumption patterns of
individual and industrial actors in these sectors, and eventually on the global
environment through their GHG emissions.
The transport sector, for example, is the fastest growing contributor to greenhouse gas
emissions from industrialised countries. Industrialised countries are responsible for
over two thirds of the global GHG emissions on an annual basis (and even more on a
historical cumulative basis). The trajectories of industrialised country GHG emissions,
and the role of subsidies in influencing this, are important issues for developing
countries because these countries are likely to suffer substantial environmental
impacts from a changed climate.

Energy and Global Security

Energy, climate change and economic issues, particularly in relation to the North and
South are inextricably linked to global security. Throughout the twentieth century,
wars have been fought over fossil fuels and the fear of war still lurks. The reliance of
rich countries on fossil fuels fosters a climate of insecurity, and a rationale for
large military budgets in the North. In the South, it often fosters or nurtures
autocratic or dictatorial regimes and corruption. At the same time, it increases poverty
and destroys subsistence cultures and sustainable livelihoods. A continued rapid
consumption of fossil fuels also ensures catastrophic environmental consequences at
the global level. These impact human safety and security as you have learnt in the
course MED-001. Fig.5.5: Energy and global
security (Source:
The Impact of Liberalisation www.mindfully.orgl)

Liberalisation or deregulation and privatisation of the energy sector are common

components of structural adjustment packages imposed by the World Bank and
regional development banks on Southern countries. They also constitute a condition
established by regional trade agreements such as NAFTA and those between the EU
and governments of the South. Governments and international organisations are
promoting privatisation, deregulation, and indiscriminate openness to other countries,
not only in developing countries, but in some industrialised countries as well.
Privatisation of power plants and power distribution are advocated by many in the
developing countries as a panacea to meet the growing energy needs. However, there
is another side to this argument.
In the case of energy, ownership of the means of production, transportation, and
distribution is not sufficient to ensure adequate performance (which entails much
more than just microeconomic efficiency); it can, in fact, be self-defeating in terms of
such important criteria as equity, solidarity, and adequate satisfaction of basic needs.
In the case of the energy sector, despite recent technological advances, markets are
still basically monopolistic. Therefore, the concepts of privatisation and deregulation
are contradictory in the case of the energy sector. Privatisation will generally require
 '. 9
Energy and Environment: even more and mort-,complex regulations, as well as the technical and economic
Current Concerns capacity, and the ed6nomic and political power, to implement it. All these capabilities
are yet to be developed in the developing countries.
As far as the issue of opening the energy sector to the external market is concerned, it
would do us well to remember that every industrialised country, at the moment of its
economic take-off, had tariff barriers to protect its nascent industries. As you have
learnt, these countries also subsidise their energy sector and hinder international
commerce through custom duties and other measures in spite of GATT and WTO.
Finally, one basic issue that the proponents of deregulated privatisation ignore is: The
development of new environmentally sound and sustainable solutions such as
renewable sources of energy (hydro, solar, wind, biomass, and geothermal). the
sustainable use of renewable and non-renewable resources, and the protection of the
environment require high initial investment that is recovered over the system's
lifespan with a reduced operating cost. This implies that the profit rates must be
reduced and the rates of return must be low. This contradicts the demands of
deregulated privatisation of a high internal rate of return in order to pursue a search
for alternatives.

This was amply demonstrated by the experience of two recent cases of privatisation of
electric systems, in Argentina and the United Kingdom. In both cases, the utilities
shifted all new investment to gas turbines fuelled by natural gas, open cycle in the
case of Argeptina and combined cycle in the case of UK. This was in contradiction to
the objective of reducing emissions of contaminating gases into the atmosphere -
decisions to which their governments had agreed at the U.N. Conference on
Environment and Development in Rio de Janeiro in 1992. This is how the policies
pursued by national governments and international agencies and their actions
regularly contradict their proclamations in speeches, declarations, development
proposals, and international agreements.
There are many other such cases. During 2001, the world experienced several
examples of the failure of market-led energy reforms such as the Californian power
crisis, the collapse of the Brazilian energy grid, and towards the end of the year the
financial collapse of the ENRON Corporation. These events brought to the fore the
inadequacy of markets as regulating mechanisms. These reaffirm the need for a
critical review of market-led energy reforms at a global level, with a view to
developing sustainable policy strategies.
It seems that sustainable, integrated, equitable human development will remain a far
cry as long as short-term, market criteria prevail, and as long as societies and their
governments lack adequate mechanisms to prevent common rescurces (air, water,
lands, renewable and non-renewable natural resources, and general health) from being
used for private benefit and not for public good.
So far we have highlighted some contentious issues between the developed and
developing countries in the energy sector. You may like to concretise these ideas
before studying about how to address these issues.

SAQ 2
Write down the specific arguments of the North-South debate related to
a) Energy and environment,
b) Energy subsidies,
c) Energy production and consumption,
d) Energy security.
I
The North-South Debate
5.3 ADDRESSING THE ISSUES
All problems related to energy production, use and their impact on the environment
have to be addressed in the broad framework of energy availability, access to
energy, and equity in energy use. Greater availability and access to energy is an
essential mndition for the economic and social evolution of developing countries.
Security of supply and equity is an issue for all countries. Solutions have to be found
within this framework for mitigating the environmental impact of the energy sector
and fostering social and economic development of the less developed countries.
These solutions involve both the implementation of current and emerging
technologies and the modification of individual human behaviour and ways of life.
Price signals will help spur these changes. At the same time, solutions are needed to
facilitate both access to energy and the security of energy systems. One has to identify
and highlight solutions that take into account these objectives and propose ways to
facilitate their implementation.

5.3.1 Energy Availability and Access

Energy is scarce in the developing countries, and as far as these countries are
concerned, their first priority is to augment energy production from all sources
in order to meet their development needs. The economic situation of the people can
be bettered only through promotion of economic activities and increasing the
.'productivity of existing agricultural and non-agricultural activities. These require
commercial energy as a critical input and its use is bound to increase in the coming
years, as you have learnt in Unit 2. The developing countries not only have to increase
the production of commercial energy but also reduce the disparities within their own
rich and poor to provide access to energy to all in a sustainable manner.
Poverty is the biggest obstacle to sustainable development and the rural poor,
preoccupied with survival, do not have an opportunity to think through the
consequences of over-utilisation of resources. Eradicating poverty and improving the
access of the poor to energy resources is a major challenge ahead.
A close relationship thus exists between the prevention of the destruction of the
environment due to indiscriminate use of non-commercial energy sources, and
utilisation of commercial energy for improving productivity, creating employment and
increasing income in rural areas. Legal and administrative measures alone will make
little or no impact in controlling the damage that is being caused to the environment
by the continuing, widespread and often unsustainable use of these resources. Specific
developmental programmes will have to be put in place for the socio-economic and
sustainable development of these regions.
The developing countries' energy consumption is set to increase to meet their
development and poverty reduction needs. This may result in increased emissions of
greenhouse gases by them. Thus, these countries cannot have any specific targets for
meeting th;: requirements of the Kyoto Protocol on climate change. Despite the
absence of specific targets or timetables, they should take measures to mitigate
climate change.
While the broad features of the energy consumption pattern in most developing
countries may be similar, there would be a marked'variation in the specific end-uses
and energy forms used from one region to another, and from one micro-region to
another, representing different agro-climatic and eco-systems within a country. This
brings out the need for carrying out energy assessment and planning for energy
production and management at all levels.
Area-based micro-level integrated planning for meeting the energy needs for
development, would, therefore, have to include, renewable energy resources which
may be tapped locally. Various commercial energy sources would also have to be
Energy and Environment: tapped for productive agricultural, non-agricultural and industrial activities for the
Current Concerns economic development of these countries. These include electricity, petroleum
products, and coal. These commercial sources of energy may have to come from
outside the country; but their production, procurement and distribution could be
planned and regulated at the national and state levels.
Attaining lower energy intensity could be one of the initial objectives. It applies to
both the use of energy for the production of goods and services for humankind and to
the supply of energy from all sources. However, to reach significantly beyond
traditional energy efficiency gains that are economically sound, society must accept
and adopt major changes in many areas, including transportation, housing and town
planning. The evolution of human behaviour must also play a very significant role in
addition to technological innovation.
The "decarbonising"of national and regional economies must be sought wherever it
is possible. This will rcquirc the development of renewable energies as well as the
development and deployment of new technologies, such as sequestration of carbon
in cleaner fossil fuel systems, the commercialisation of bio fuels and the development
of forests. This approach can also contribute to the security of supply.
All these aspects require urgent interventions for energy production and distribution in
developing countries. These have to be undertaken through integrated energy
planning mechanisms which specifically take into account energy requirements of all
sections of their population for sustainable development.
Recognising the critical role of energy for sustaining their economic growth, most
developing countries have set up institutional mechanisms for energy sector policies
and planning. Issues that are of direct interest to the developing countries include
funding, technology transfer and capacity building.
Funding is important because it can aid all development projects, particularly because
financial resources are often the biggest constraint in developing countries.
Technology transfer from the developed countries and funding of energy
programmes of the developing countries have to go hand in hand.
A word of caution is in order: Increased levels of foreign direct investment may be a
mixed blessing. Multinationals with better technologies, energy management
systems and training programs may spur better energy and environment
management in other national firms. At the same time, however, increased
foreign direct investment may also lead to increased production and
consumption of energy intensive and polluting goods.
Enhanced capacity building will be required in developing countries to improve the
information availability and disscmination, government ability to promote an enabling
environment and engage in negotiations with the developed world to protect their
interests, and to manage technological change. .
. . . ..
Negotiating on energy related issues requires first of all the ability to understand. and
. .
articulate national needs and concerns and to place them on the international aienda. ' . .
The global climate discussions have been characterised by sophisticated strategising
. .
., . .. to best serve national interests, rather than mutual coopcration. Thus. developing
. .. nations need to support and propagate national positions through targeted analysis.
. . . ..
,

' This requires a focus on h e capacity for detailed strategic policy analysis and use of
the knowledge gained for developini n'atioilal positions. Also, education, extension
and training programmes for decentralised energy production, efficient energy use and
managing technology transfer and change are essential for capacity building.
Capacity retention is a serious problem in the South. The migration of highly skilled. .
workers to the North (the "brain drain") leads to a loss of embodied kr;6&l&lg&and - - .:
expertise in the South. Immigration policies in OECD countries tend to favour better-
educated people, and therefore are partly responsible for the migration of highly- The North-South Debate
educated workers from developing countries.
But the advances in technologies, institutions, and financing arrangements are not
enough. To attract and sustain private investment, developing country governments
must provide appropriate governance and investment conditions.
Governments' role
This means supporting economic growth, adopting legal and regulatory frameworks to
keep energy markets fair, efficient, and incorrupt and establishing clear, sensible, and
reliable rules for transacting business. The greater emphasis on distribution and
customer-side service is opening up new prospects for energy efficiency, distributed
supply, and off-grid service delivery means.
Further, recent developments in conventional and renewable energy technologies
have made distributed and off-grid energy services technically and economically
more attractive. Alternative approaches to energy service delivery need to be
promoted, including giving service providers incentives to diversify and innovate to
enable clean technologies, fuels, and incentives to compete on equal terms.
The developing countries could exploit their hydroelectric potential and the potential
for new and renewable sources of energy. They could focus on efficient energy-use to
address issues such as C 0 2emission reductions and energy availability.

PATHWAYS
TO
ADDRESSING
THE ISSUES

Fig.5.6: Pathways to addressing the issues in North-South debate

5.3.2 Equity
We have to also ensure equity in distribution and access of energy by bringing about
reduction in the existing sharp imbalances in energy consumption, among the
developed and developing countries, within rural and urban areas in developing
countries. and between the rural rich and the rural poor. The disparate consumption
patterns also underscore the need for more efficient and environment friendly
energy utilisation in the developed industrialised countries.
Energy and Environment: Ensuring equity requires thoughtful and informed decision making. It could consist,
Current Concerns for example, of linking the emissions of a country to factors like population, economic
activity, income, energy 'consumption, energy resources and level of technological
development. Adoption and implementation of such criteria, even in the long run, will
require extraordinary leadership from governments and industry working together
with other interested parties.

All projects related to the energy sector, and especially carbon sinks if aliowed, should
be subject to transparent assessments of environmental and social impacts. A rigorous
environmental impact review process needs to be established, so that these projects
provide net benefits, not only for greenhouse gas emissions, but for the local
environment, without displacing indigenous people and without any unanticipated
negative consequences. The assessments should be carried out independent auditors
using international standards and with full public participation including the
opportunity for review and comment.
For this, procedures that guarantee public participation in all phases of the project
cycle would have to be put in place. All relevant information such as project design
documents, assessments, public comments, monitoring and verification reports, etc.
should be made available in the public domain so that people get meaningful
opportunities to participate in the process.
The multi-dimensional and complex energy scenario of the developing countries
needs a comprehensive approach for tackling it. Integrated energy plans should
determine the most cost-effective mixture of different energy sources - commercial,
non-commercial, renewable and non-renewable - for meeting the diverse energy
needs of different income groups in an equitable manner. For this, various technical,
socio-economic and cultural factors would need to be taken into account, such as:

people's needs and priorities;

the integration of environmental concerns at local, regional and global levels, with
existing and proposed development programmes in the developing countries, for
example an improvement in energy efficiency (decrease of energy intensity) for
reconciling the challenges of climate change, access to energy and security of
supply;
the establishment of national and global agenda for R&D to foster technologies
that enable national, regional and global energy systems to address all the
requirements in industrialised and in developing countries;

a serious examination of the modalities of technology transfer,

an increase in the effectiveness of existing mechanisms (of the CDM type) by

opening them to all countries and to all technologies that reduce emissions and by
adopting an approach that is both simpler and more transparent;

the re-orientation of public investments in public-private initiatives and

partnerships, which would make it possible to more effectively engage companies
in the issue. I

Thus, we would be able to ensure the integration of energy with employment and
environment as part of the total development process.
The integration of planning for energy with environmental concerns and the economj
development programmes at the state and national level is a complex process no
doubt. It involves overcoming a large number of barriers and constraints between th
developed and developing countries, which have been discussed in the previous
section.
 To sum up, energy is a vital resource that should be embedded in the development The North-South Debate
strategy of developing countries. The strategy should address at the same time, other
fundamental issues such as education, and health care, public participation in
decision-making and econolnic opportunities for the poorest. The need is to steer the
financial investments of the developed countries away from support for fossil fuels
and towards more socially responsible and environmentally friendly alternatives.
Support for energy efficiency and renewable energy is a key element, together with
creating the conditions to meet the needs of the poorest, North and South, in an
equitable and democratic manner.

' SAQ 3
Outline the ways in which the developed and developing countries can cooperate to
increase the access and availability of clean energy around the world.

In this unit, we have sensitised you to the major issues in the energy-environment
debate between the developed and the developing countries. We now summarise its
contents.

5.4 SUMMARY
The challenge before the developing countries today is to improve energy
availability and access to modern energy services for their people in ways that are
sustainable, that address energy security concerns, and minimise local and global
environmental damage.

The debates between the developed and developing countries about the policies ,

and mechanisms required to meet the growing energy needs of the people in a
sustainable manner centre on many issues: sharp disparities between the energy
production and consumption patterns of these countries. as well as between the
rural and urban areas within the developing countries, inefficient energy use,
impact on the environment, etc.
The disproportionate responsibility of the impact of energy use in these countries
on qlimate change gives rise to contentious questions such as how are the GHG
'emissionsestimated, who should reduce GHG emissions and by how much,
how these reductions will be achieved, and how the burden of impacts,
adaptation, and mitigation will be shared.
The Kyoto Protocol specifies three flexible mechanisms to help meet the
challenge of combating climate change: Clean Development Mechanism
(CDM), Joint Implementation activities (JI), and Emissions Trading. The
CDM is a system that would give industrialised countries credit for financing
technologies in developing countries aimed at reducing emissions.

Substantial subsidies to the energy and transport sector exist in both the
developing and the industrialised countries. These subsidies have a direct and
significant influence on the consumption patterns of individual and industrial
actors in these sectors, and eventually on the global environment through their
GHG emissions. However, the removal of subsidies cannot be advocated only for
the developing countries as it impacts the lives of their poorer sections the most.

I' There is a need for more efficient and environment friendly energy utilisation
in the developed industrialised countries.
Liberalisation or deregulation and privatisation of the energy sector and concerns
for global security give rise to many debatable issues.

The concerns of both these categories have to be addressed in the broad

framework of energy availabiliw, access to energy, and equity in energy use. This
Energy and Environment: involves many measures. Energy production from all sources has to be
Current Concerns augmented. Energy assessment and planning for energy production and
management at all levels has to be carried out. Funding, technology transfer and
capacity building are major issues. These days distributed and off-grid energy
services are becoming quite popular. Public participation in all stages is a must.

5.5 TERMINAL QUESTIONS

1. Explain the Indian position on climate change and giobal warming.

2. Analyse the impact of liberalisation and privatisation of the energy sector on the
people of the developing countries.
3. Discuss the framework in which the concerns of the developing countries in
energy sector need to be addressed.