Clean Energy Access and Poverty Reduction

Archive — discussion before the 2015 Paris climate conference. Figures and policy targets relate to the period before the 2015 conference.

Energy and opportunity

Reliable energy supports livelihoods, small businesses, education and daily household needs. More than one billion people lacked electricity, limiting their opportunities to improve living standards.

Expanding access also raises questions about emissions and climate resilience. Poorer communities often have fewer resources to respond to extreme weather and other climate impacts. The challenge is to provide useful, affordable energy while reducing the environmental burden of development.

A combined policy approach

Five areas of World Bank attention were: low-carbon cities, climate-smart agriculture, energy efficiency and renewable energy, reform of fossil-fuel subsidies, and carbon pricing.

The underlying goal was to separate economic progress from growth in emissions, combining policy, technology and financing rather than asking underserved communities to give up access to energy.

Project examples

New renewable-energy investment grew by 4% globally between 2010 and 2012, with East Asia playing an important role. In Bangladesh and Mongolia, small solar systems were described as improving rural households’ access to lighting and useful services.

For Bangladesh, it cited more than 3.5 million home solar systems and approximately 70,000 direct jobs. For Morocco, it described a then-target of renewable energy reaching 42% of electricity capacity by 2020, and investment increasing from USD 297 million in 2012 to USD 1.8 billion in 2013.

Carbon pricing and green finance

Around 40 countries and more than 20 subnational jurisdictions were using or planning carbon-pricing arrangements, with a combined value approaching USD 50 billion. These figures illustrate the scale discussed at the time, not the present market.

Green bonds were presented as another way to support lower-emission development. IBRD had issued 100 green bonds in 18 currencies, IFC issuance reached USD 3.9 billion and the global green-bond market was about USD 38 billion.

Two energy-efficiency projects in China were cited with estimated reductions of 12.6 million tonnes of CO₂, equivalent to taking about 2.7 million cars off the road annually. Such comparisons depend on the project and calculation assumptions.

Development and resilience together

In the lead-up to the Paris conference, climate discussions increasingly involved finance ministries as well as environmental authorities. Energy efficiency, cleaner supply and access for poorer households were presented as complementary priorities.

For a new project, assess affordability, reliability, local needs, lifecycle impacts and a credible financing model. Historic targets and market values should be replaced with current evidence before investment decisions.