ENERGY ENVIRONMENT POVERTY

at Towards and Energy Community of South Eastern Europe (ECSEE) Conference for SEE Parliamentarians, Social partners and NGOs Bucharest, October 11-12, 2004

ENERGY ENVIRONMENT POVERTY

Automatic presentation based on the project Energy, Environment and Poverty in Serbia and Montenegro Prepared by Aleksandar Kovaevi aleksandar.kovacevic@undp.org

Energy is major determinant of Human Development Index (HDI)

There is a link between the HDI and the energy consumption During 1990s high HDI was achievable with lower energy consumption per capita than during 1960s. (See next chart) The change is facilitated by higher energy efficiency and better governance.
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Between 1960s and 1990s:

Less energy for better HDI

Application of data sets from IEA World Energy Statistics, 2000 Edition, UNDP RBEC Human Development Under Transition, March 1998 and Survey results to framework diagrams provided by Carlos Suarez in Energy Needs for Sustainable Human Development, Energy as an Instrument for Socio-Economic Development UNDP, 2002. 4

Energy Facilitates National Product

Creation of national product (GDP) requires certain amount of energy. Less energy per unit of national product higher energy efficiency. Throughout the SEE energy efficiency is too small. For 1% of the GDP growth countries require more than 1% more energy.
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GDP and energy consumption in Serbia and Montenegro

% 120

100

ENERGY CONSUMPTION

80

60

40

GDP

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0 90 91 92 93 94 95 96 97 98 99 00 2001

Growing Energy Efficiency Facilitates Employment

When energy efficiency improves, chances for employment are growing beyond actual investments. Quality of growth is better as higher incomes improve investment opportunities.

Lower Energy Efficiency Affects Security

SEE is comparatively poor in energy resources. Larger energy needs mean more imports of energy. More energy imports mean more difficulties in national and human security.

Poor Housing is Foundation of Poor Energy Efficiency

Poor housing is a long term problem. People tend to use inefficient heating methods within poor housing. People tend to reduce heated living space in response to high energy costs.

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Average energy consumption per square meter of living space is about 2.5 times greater in Serbia and Montenegro than in Northern Europe, yet in more than one in four households the amount of heated space per person is below minimum health standards

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Only 38 percents of the respondents heated all rooms in the winter period!

All rooms 38%

Only certain rooms 62%

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In a four-member family, the children of opposite sex aged 19 and 20 have to be in one room during winter. This is the cause of frequent conflicts between these young people and their parents.

They always object to it, but I can not heat the other room. What can I do? This is really terrible, but what can I do?

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38.5 percent of the respondents heated less then 10 square meters per household member
< 5 m2 5.1 - 10 m2 10.1 - 15 m2 15.1 - 20 m2 20.1 - 25 m2 25.1 - 30 m2 > 30 m2 5% 9.8% 9.7% 19.9% 17.1% 10% 28.5%

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Deforestation
Deforestation followed by erosion and other problems is an immediate consequence of inefficient use of fuel wood. Fuel wood is generated from unregistered wood resources or illegal harvesting and not necessarily presented in national statistics.
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60.5 percent of the respondents used wood/coal as the main heating fuel!
Wood/coal 60.5%

District heating

22.2%

Electricity

12.2%

Gas

3.8%

Propane-butane gas

1%

Petrol/gas/fuel 0.3%

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Our ancestors heated in this way, the first man heated like this and it is certainly the best way Statement during group research with solid fuels consumers group

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Fuel wood price at open market is linked to price of electricity at given level of energy efficiency. Therefore, the poor are affected by high electricity prices even if fuel wood dominates their energy use.

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Energy Use Generates Pollution

Particulates, NOx, Sulphur Dioxide and heavy metals are among most difficult pollutants. Pollution affects housing, agriculture and human health. It affects the poor dis-proportionally more than the better off.
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Soil acidification in Serbia throughout Obrenovac air shed

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Fuel consumption and number of registered vehicles had remarkable elasticity of 4 to 1 or more against GDP growth rate

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Significant Winter mortality determined by research

More people are dying during Winter than during Summer months: Insufficient heating, indoor and settlement pollution related with energy contribute to Winter mortality. Higher Winter morbidity affects working and education capabilities.
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Deaths, Average per months

Serbia and Montenegro excluding Kosovo

Dec.-Feb. 2001 Mar.-Nov. 2001

475 8883 6311 2572 445 8040 5729 2311
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Montenegro Serbia Central Serbia Vojvodina

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That SEE is poor in energy resources was known in 1950s

Region Available energy resources per inhabitant In tons / inhabitant
610 2471 6872 9269
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SEE Rest of Europe USSR USA

An non-integrated power industry would be a luxury, which this part of Europe (SEE) could hardly afford.
Stjepan Han, 8th World Power Conference, Wien, 1956
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Lack of integration and competition of energy industries within SEE and between the SEE and the rest of Europe spurs development potential, utilization of resources and poverty reduction capacity

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George Stigler (Nobel Prize Laureate):

Only when elasticity of supply is small will the industry prefer cash to controls over entry or output When receives a grant of power from the state the benefit to the industry will fall short of the damage to the rest of the community
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Society always pay full cost of energy:

Directly, through price of energy or Indirectly through environmental and health expenses or lost development opportunities. If price of energy does not cover all expenses, burden tend to fell on those who enjoy less benefits from energy the poor.
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These costs could be reduced:

By better integration of the industry in technical and commercial terms, By improving governance and Better integration between the energy policy, Poverty Reduction Strategy, spatial planning and other development policies.

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New technology and methods of governance make it possible to improve the standard of living at a given level of national production. To realize the substantial development opportunities that eventually could be created by increased energy efficiency and higher productivity, country needs a development vision
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ECSEE could be seen as a tool to introduce integration and better governance, improve efficiency and use of scarce energy resources in order to facilitate the poverty reduction and the achievement of Millennium Development Goals (MDGs) shared by countries from the region.
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Available for download at

www.undp.org.yu ENERGY - POVERTY

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