Draft – South African NGO / civil society Energy Position Paper for the World Summit on Sustainable Development

Note: This is the final draft, endorsed by SESSA (the Sustainable Energy Society of South Africa) and circulated now for endorsement and/or final comments. Drafted by Richard Worthington from Sustainable Energy and Climate Change Partnership (SECCP), circulated to and incorporating comments from a wide range of civil society representatives. Square brackets [...] are used to indicate discussion or text that requires further attention.

Contents: Introduction; Targets; Status of Energy Technology and Targets; Means to achieve targets;

Introduction

The phrase 'Energy for Sustainable Development' is widely promoted as more politically correct than the highly contested term 'Sustainable Energy'. "Energy for Sustainable Development", however, is often used as a guise for continuing business-as-usual, where growth is an end in itself and social benefits are simply assumed to follow.

We therefore need to take two recognised international priorities as a point of departure:

1. Access to energy

2. Addressing environmental impacts.

We mean by these two terms the continuous, unbroken delivery of energy services while systematically reducing poverty and the amount of human suffering, as well as reducing environmental degradation and natural resource depletion resulting from energy provision.

Clear and measurable commitments to a more equitable and less damaging global energy regime are needed at the World Summit for Sustainable Development in August 2002, principally by those who control resources. Additional measures are also needed to ensure transparent implementation.

We also need to address the impact of international competition over the supply of fossil fuels. We believe that a greater diversity of energy resources is in the best interests of national and international security. Although the phrase 'access to modern energy' has become popular, we believe it is has too many meanings to be helpful, where - for example - 'modern energy' is often used to refer to electricity.

Another common phrase is 'affordable energy', which is highly subjective and dependent on local and personal circumstances. Sometimes it includes the full costs to society, sometimes the costs to providers, and at other times the ability of customers to pay. We believe that is important to include not only the rate at which energy is charged but also the percentage of household income that is dedicated to energy. While poor households frequently pay as much as 25-40 percent of their income, affluent households may pay as little as 2-4 percent.

Since an often-ignored aspect of access is the sustainability of access, host country South Africa provides a starkly cautionary tale. National electricity provider Eskom unashamedly declared that it had made "good progress" in 2001 in achieving a target of 20 000 disconnections per month, in Soweto alone. A significant proportion of beneficiaries of the South African national electrification programme (in itself a proud achievement) were left both in debt and without energy, a year or two after embracing "modern energy". For access to be sustainable it should not be confused with the simple extension of a national or regional grid. 

We therefore believe in an integrated approach to energy supply, where all existing hydrocarbon, biomass, wind and solar sources need to be developed equally, along with measures to enhance energy efficiency and energy conservation in every sphere of the economy, public, private and household. Since we further believe that it will take time to achieve true sustainability of an integrated energy supply, we need to debate before the World Summit what the period of transition might be, and what constitutes acceptable technologies and practices during that transition. In no way, however, do we consider nuclear power an option for the future and will oppose any attempt to re-introduce such technology as "renewable" or "sustainable". 

On the issue of sustainability of access, however, there is no room for such debate: access must be achieved on an on-going basis, without increasing household debt, without draining community resources, and without increasing the dependency of communities. Since access is often trumpeted in the name of poor communities, the social impacts of any energy programme must be thoroughly considered in full partnership with those communities themselves. 

Business leaders and corporate lobbyists, who insisted at CSD 9 in March 2001 on the 'energy for sustainable development' approach by invoking the 2 billion people without access, need to demonstrate and make provision to ensure that they are not simply extending their customer base in the name of human rights. Governments and civil society must insist on commitments and effective measures to ensure that delivery of energy services is not just another means of extracting wealth, but rather a means of empowering communities and individuals, i.e. by ensuring sustainable access.

This is not to say that we must keep the majority of costs externalised or in other ways perpetuate business-as-usual, but rather that a free basic allowance should be adopted at a regional level, with pricing related to ability to pay as well as level of consumption. There is growing recognition that cheap electricity is no guarantee for attracting foreign direct investment (in fact, no direct relationship to net investment has been established), and there is reason to doubt whether it offers a competitive edge, since South Africa offers the cheapest (or 2^nd cheapest) electricity in the world but ranks among the lowest on the global competitiveness scale.

The only way to avoid the 'battle for bottom' that gives rise to the most harmful practices [and to address the view that we can't afford to develop and consume sensibly, e.g. that Africa can't afford to prioritise sustainable energy], is to move to international standards and targets, with dependable commitments to co-ordinated internalisation of full costs. To achieve this also requires recognition and fulfilment of common but differentiated responsibilities, based on the different development status and affluence of nations.

As WSSD host, South Africa has obligations to the international community and has the potential to lead Africa in local development and deployment of modern renewable energy technologies. It would be a grave disservice to the continent if South Africa continued to lead and encourage Africa down an unsustainable energy path.

The social impacts of energy delivery (or the absence of energy delivery) will rightly be the driver of WSSD resolutions on this issue, but we need to ensure a just transition to better practice in the energy sector. This will require taking into account the needs and vulnerabilities of stakeholders and acceptance that the countries and corporations that have benefited the most from the [largely irresponsible] exploitation of finite energy resources and large-scale projects, such as big dams, should now contribute resources to achieve a cleaner, more efficient and equitable energy future.

The prevailing attitude of acquisition and then guarding or withholding scarce resources needs to be tempered by commitments to sharing the benefits derived from such exploitation of the global commons, whether those benefits are financial, technological or intellectual. It is only with such an attitude change that WSSD will initiate significant and effective technology transfer, capacity building and universal participation in the eradication of poverty.

Targets

sustainable access to energy &

reduction of the adverse social and ecological impacts of energy service delivery

South African civil society representatives call for:

1. Adoption and/or commitment to national, regional and global targets for achieving sustainable access to energy, including:

• a universal commitment to reduce by half the number of people without sustainable access to locally appropriate energy services by 2012 (implies at least 55% of Africans have access by 2012);
• a commitment by industrialised nations (OECD) and transnational corporations to support provision of free basic electricity supply [50 kWh per month per household ] in developing countries or communities;
• formalisation of the South African DME commitment to universal access to modern energy services in South Africa by 2010.

1. Adoption of national, regional and global energy efficiency targets and commitment to introducing sector specific standards including:

• a universal commitment to a four-fold increase in energy efficiency for all economies, national and transnational, relative to year 2000 baselines, by 2012;
• development of per capita fuel efficiency targets and reporting of energy use and efficiency trends for particular population groups, to raise awareness of individual impacts, particularly among the affluent, and encourage behavioural change and more responsible purchasing.

1. Adoption and/or commitment to national, regional and global targets for the deployment of renewable energy technologies, with differentiated targets according to development status, affluence and impact on regional and global environment, including:

• an OECD commitment to achieve 10% of primary energy supply from renewable sources by 2010 and 25% by 2020;
• a South African commitment to10% of electricity generation by renewable energy technologies (RETs) by 2012 and 20% by 2020;

Financing:

1. A commitment to changing the ratio of investment – fossil fuel, nuclear and large dams to energy efficiency and renewable energy - by states and state-owned entities, export credit agencies and international financial institutions, to favour energy efficiency and renewable energy, including:

• international government commitment to achieve an overall ratio of 1:1 within 5 years, followed by continued improvement and no less than 1:2 by 2012;
• all governments commit to assign, in the next budget allocation, a minimum 25% of national energy research, development and demonstration funding to energy efficiency and renewable energy technologies, rising to at least 66% by 2012;
• South Africa commits to direct the proceeds of the existing fuel levy specifically to development of renewable energy [including bio-diesel] and energy efficiency initiatives;
• OECD country commitments to:

• immediately target 25% of energy sector financing and support (including guarantees) through Export Credit Agencies to renewable energy development and energy efficiency programmes, with a target of 70% by 2007 and 90% by 2012 [or 100% within 10 years?];
• ensure that all International Financial Institutions they support adopt the same targets;

• certain large key institutions, such as the World Bank, should be required to make specific commitments e.g. to reverse the current ratio of investment by 2012
• all countries commit to phase out subsidies to ‘conventional’ (fossil fuel, nuclear and large dam hydro-power) energy sources by 2012 – this should be achieved in conjunction with a broader programme to remove barriers to the rapid global expansion of renewable energy.

[ ALTERNATIVE TO LAST BULLET UNDER 4:

4.a. A commitment by industrialised countries, export credit agencies and international financial institutions to:

• phasing out of all such subsidies, with the exception of any clearly and effectively targeted to providing basic energy services for low-income persons, over a 10-year period, with a 70% reduction within 5 years;

4.b. A commitment by developing countries not identified as Least Developed Countries to commence an equivalent phase-out process as industrialised countries (as contemplated in 5.a.) within five years. ]

1. A commitment by all countries, export credit agencies and international financial institutions to:

• full disclosure of power sector data and particularly all subsidies, cross-subsidies and other financial support to the production and/or consumption of energy, most particularly conventional energy, including subsidies in high energy consuming sectors such as transport, mining, agriculture and minerals beneficiation;

1. A commitment by all participants to using cost-benefit analysis, considering full costs and life-cycles, in all sectors and for all projects and budgetary allocations, and to compare any and all energy projects with implementation of energy efficiency/conservation programmes.
2. A commitment to institutionalising a regional approach to integrated energy planning that emphasises co-operation amongst developing countries, with democratic procedures that facilitate protection of the interests of Least Developed Countries and prevents rapidly industrialising countries (economies in transition) or Northern agencies from wielding undue influence. Government commitments to this end should include provision for full public and stakeholder participation, with common standards for due process and access to information.
3. A commitment to improving access to public transport, with recognition that state spending on public transport will be off-set by improved air quality and public health and reduced productive time losses in transit and consumption of imported fuel, with a target of 70% of commuter trips in high occupancy vehicles (HOVs) with a minimum 3 passengers by 2010 and at least one lane of freeways and main roads, in each direction, reserved for HOVs only.

Status of Energy Technology and Targets

The above targets may be called unrealistic or radical in certain quarters, but it is widely acknowledged that humanity has the means and resources to achieve them, all that is currently lacking is the will. The technology and financial resources exist, as well as various presentations of the policies and measures that would mobilise the necessary development, but the necessary changes are perceived as a threat by many entrenched interest groups. WSSD cannot overnight force a change in direction, but it is an opportunity for world leaders to demonstrate the political will and declare in measurable terms the steps to be taken to achieve maximised benefits, social, developmental and ecological, from the planet’s energy resources.

The benefits of many of the actions necessary to provide energy services within sustainable development - particularly in developing countries - will not necessarily accrue to the investors in conventional energy development. Indeed, the whole point of many recommendations is to ensure that the benefits of energy development are more broadly spread across society, on a national and global basis. It will therefore require considerable will and leadership to ensure that entrenched interests don’t prevent or disable the establishment of meaningful commitments.

In this context, adopting targets is part of a set of actions/provisions that should be covered in the text agreed at WSSD, which are:

• Target
• Timeframe
• Means of implementation
• Financial resources
• Institutional requirements and framework arrangements
• Monitoring, reporting and accountability mechanisms
• Stakeholder involvement

Means to achieve targets

International Institutional Arrangements

There is a clear and urgent need for an international institutional arrangement to address energy issues. One or more funds need to be established to support energy access as well as conversion to cleanest and most sustainable energy technologies. Subsidy reform and internalisation of externalised costs should be internationally co-ordinated to minimise (short-term) competitive disadvantage that might otherwise accrue to more progressive nations or corporations. Democratically constituted and accountable institutions are needed to manage funds, develop and disseminate information, mobilise technical support and provide monitoring and verification of progress to implement WWSD and other agreements and commitments.

Development co-operation must ensure that market reform programmes, including IMF Structural Adjustment Programmes and privatisation/restructuring deals, allow and provide for achieving targets for access and reduced adverse social and environmental impacts.

An international institution would also assist in ensuring that all ECA and IFI supported projects meet investor country as well as host country environmental standards and are the subject of adequate assessment with public participation. Technology transfer commitments and mechanisms should also fall within an institutional framework that provides for stakeholder participation.

The considerable overhead costs of establishing a new institution(s) are not sufficient reason ignore the need for reform or fail to address the inadequacy of current institutional provisions. Considering the impact energy needs and interests have on global, regional and even cross-border security (from outright war to benzene smuggling) a considerable investment is warranted, even if it requires redirecting military spending.

Financing

Subsidy reform is key – phasing out perverse subsidies to high-impact energy carriers [at a pace consistent with providing for worker retraining] while using well-focused and targeted subsidies to increase access and level the playing-field for under-developed and emerging energy technologies and to compensate for lack of market valuing of social and environmental benefits of renewable energy technologies. For example, solar home systems should not only be rendered competitive due to remoteness from the grid but should also be rewarded for low impact locally, regionally and globally (without relying exclusively on the Flexible Mechanisms of the Kyoto Protocol). This should include:

• regional and global co-operation to move to international policy frameworks, making allowance for local economic and development status and recognising common but differentiated responsibilities, with dependable commitments to synchronised implementation;
• formal recognition of the need for economic instruments to redress market imbalances and deliver social and environmental benefits, so as to protect such measures from challenge through the WTO;
• [cancellation of certain debts incurred through hosting large-scale energy projects that have delivered little or no local benefits]

Funding

Renewed commitment to the (1992) Official Development Assistance (ODA) target of 0,7% of GDP

Commit to additionality of climate change funding, with monitoring to ensure that the funds delivered under the UNFCCC and Kyoto Protocol are additional to ODA. The OECD Development Assistance Committee (DAC) receives complete annual reports on ODA from all donors and therefore has an overview of country activities. WSSD should request that the Conference of the Parties (COP) to the UNFCCC instruct the DAC to prepare an additionality report, to be combined with the annual funding reports that Annex II Parties are required to present to the COP for review.

Establish an international fund to finance sustainable access to energy services derived from renewable energy resources – a ‘Sustainable Access Fund’.

The need for micro-financing for small-scale and local-based development of energy resources must be addressed by new institutional arrangements.

Establish a fund, stocked by a new levy on sales of fossil fuels, to provide for:

• monitoring and reporting of human rights violations in the fossil fuel industry and where appropriate provide support to prosecute offenders;
• legal and other support to enforce the rights of neighbouring communities and others impacted by the fossil fuels industry;
• medical treatment and other aid to people impacted by the fossil fuels industry (where there is no legal recourse to the polluter);
• rehabilitation of polluted sites (where there is no legal recourse to the polluter);

This levy should specifically include all sales of bunker fuels (maritime and aviation fuels) and military spending on fuels. This levy could be set at a level that will also allow for resourcing of the ‘Sustainable Access Fund’ proposed above.

Equity

Energy sector development is characterised by lack of equity, including in terms of: access; share of resources; percentage of income directed to achieving access; the burden of providing energy services, as well as the impacts of fuel use, falling disproportionately on one gender; impacts concentrated in poor and disadvantaged communities; undue share benefits to the North / privileged minority. Addressing such inequities should be acknowledged not only as a justification but as a driver for intervention by governments and international institutions to move beyond perpetuation of business-as-usual.

Pricing

A planned, time scheduled and just transition to a more full-cost reflective energy pricing system, to allow for gradual incorporation of externalised costs in energy pricing, starting in the North [with early action by highly industrialised and impacting nations and/or population sectors in the South] and being adopted in a co-ordinated manner to avoid competitive pressure not to comply.

Regulation / Legislation

Regulation of energy suppliers and markets needs to be strengthened and regional co-operation developed. Regulation should include adoption of renewable energy grid-feeder laws to level the playing field for sustainable energies, and support action to achieve national and regional targets for grid connected renewable energy, including supporting development of independent power producers and ‘green power’ marketing. International or regional standards should be developed for the regulation of energy suppliers and markets that do not force privatisation or require nations to open their markets to northern/transnational business interests.

Localisation

To achieve sustainable access for those in energy poverty will require greater diversity not only of energy sources but also of delivery strategies, financing and ownership models and marketing. Development of large-scale infrastructure to promote regional efficiency and energy trade must be at least equally matched by investment in small-scale infrastructure, including mini-grids, financing of small energy service companies and hybrid energy projects such as combined wind and biomass generation projects. Development of energy storage technologies, particularly those compatible with decentralised deployment [and improved quality of local supply], also merits special consideration.

There is generally greater and more systematic externalisation of social and environmental costs in the process of large-scale development, which may make such initiatives appear to be better value for money than they really are. All energy sector investment needs to be evaluated according to a rigorous application of triple-bottom-line accounting (full quantification of all social and ecological, as well as economic, costs and benefits). Strengthening local economies, to minimise needs for external inputs and imports - thus reducing transport requirements - and maximise potential for dispersed energy generation and/or storage, should be recognised as an energy efficiency intervention.

Technology Transfer & Capacity-building

Knowledge and skills transfer needs to be facilitated and supported on a South-South as well as North-South basis, with development of centres of excellence and regional co-operation. Information sharing, awareness raising and capacity building regarding energy options, consequences and impacts needs to be supported at all levels of society and with input from all stakeholders.

Agreement is needed to a working definition of technology transfer that has standards or rules for licensing agreements that qualify for governmental support and enables national and/or international institutions to require sharing of intellectual property.

Public participation

Institutionalisation of public participation should occur in integrated energy planning at local, national and regional levels, with development international standards/criteria for transparency, accountability and access to information and for public participation in development planning, feasibility studies and environmental impact assessments.

Bunker fuels (maritime and aviation fuels)

Develop a system of taxation on bunker fuels and initiate a process to bring bunker fuels into the international climate change governance system.

Transport

Initiatives in the transport sector must serve to facilitate a move towards least polluting, safest, public transport systems that do not rely on fossil-fuelled technology. Planning and development in the transport sector, as well as related development planning such as housing, must be evaluated in light of full costs, including those to public health through air pollution and full costs of road infrastructure.

To facilitate deployment of public transport there should be widespread sharing of experience and best available technologies

Characterisation of sustainable energy [and most appropriate technology]

Support for sustainable energy requires distinguishing what interventions need and merit favoured status:

In energy efficiency this means distinguishing between interventions that should and can occur as part of business as usual, and can be required through phasing in standards, i.e. having a net negative cost in the medium term (this includes most demand-side management strategies), and those interventions that offer social and environmental benefits without significant medium term financial return and thus would not occur without special treatment.

Renewable energy includes biomass (from sustainably managed indigenous resources), wind, wave, solar thermal, photovoltaic, micro-hydro, geothermal, and deployment of hydrogen technology and fuel cells.

The myth or posture of ‘technological neutrality’ that has been adopted by many decision-makers and lobbyists needs to be critically assessed. We hold that, since particular technologies have both requirements (e.g. fuels) and impacts from which they cannot be divorced (mitigation of many impacts is possible but at a certain point the expense of thorough mitigation undermines any rationale for use of the technology), the stance of ‘technological neutrality’ is simple denial or refusal to make strategic decisions.