Benefits of modern energy must reach the poor

Following is the full text of the speech delivered by Prince Abdulaziz bin Salman, assistant minister for Petroleum Affairs at the Ministry of Petroleum & Mineral Resources, at the opening of the 3rd Gulf Environment Forum (GEF 2012) at the Jeddah Hilton on Sunday night. Your Royal Highness, Excellencies, distinguished guests. I would like to thank you for inviting me to speak here today. It is 20 years since the historic Rio summit on sustainable development. This moment, and this event, gives us an opportunity to reflect on the progress - or lack of it - which has been made, and to look ahead to the challenges before us. Because we should be under no illusion that great challenges lay ahead. And before we rush to sign up to yet more Utopian visions, let us be realistic about what more needs to be achieved. Energy poverty is an issue for many economies, but it has a particularly severe impact on poorer nations: • Nations where energy is either physically inaccessible or economically unaffordable. • Nations which still rely on biomass and coal for household heating and cooking. Bringing the benefits of modern energy to the poor of the world is upmost in our minds, and at the foremost of our ambitions. It is incumbent on us all to work toward countering issues such as accessibility, affordability, reliability and continuity of energy supply. And since the poor live under diverse, often remote, and varied geographical and ecological situations, it is clear that to address energy poverty effectively, all options must be considered. Of course, fundamentally, energy poverty is about poverty. It is only by combating poverty that energy poverty issues can be overcome. And it is worth keeping that in mind when we consider the reality on the ground today. Your Royal Highness, Excellencies, distinguished guests. The current Zero Draft of the Rio+20 outlines three energy goals to be achieved by 2030. It is these three goals I intend to focus upon. They are to ensure universal access to modem energy services; to double the rate of improvement in energy efficiency; and to double the share of renewable energy in the global energy mix. I will then turn, briefly, to the work Saudi Arabia has done - and is doing. I have to say at the outset that meeting the Rio+ 20 targets will come at a cost far beyond the affordability of most developing countries. Where a country cannot meet the basic needs of their populations, these costs will not be a priority. So these costs need to be met by others. Let me first discuss universal access to modem energy services. The UN Secretary General's Advisory Group on Energy and Climate Change has concluded that providing modem energy services to the 3 billion people who depend on biomass and coal for their cooking could cost as much as $2-3 billion per year by 2030. Also, that to provide minimum access to electricity - enough for basic lighting for 1.4 billion people who currently have no access to electricity - would cost around $35-40 billion a year. In the International Energy Forum, held in Kuwait recently, Sha Zukhang, the secretary general of the 2012 UN Conference on Sustainable Development, indicated that the cumulative investment to provide a universal modem energy access by 2030 is about $1 trillion, or an average of about $48 billion per year. These are enormous sums. The group recommends finance should be made available by the "international community". Yet if Official Development Assistance (ODA) is to be considered, it should be noted that the program is already under-funded. The funding requirement of the energy access goal alone is about 30 percent of total ODA provided in 2010. The extent to which the goal is achievable, therefore, remains unclear. The second goal is doubling the rate of improvement in energy efficiency by 2030. This target calls for improvements in energy efficiency of about 2.5 percent every year, reaching 40 percent by 2030. This target raises many questions in regard to what is achievable. The cost of meeting the target is estimated at $30-35 billion annually until 2030 for low-income countries, and $140-$170 billion annually for middle-income countries. Again, who will pay the bill? The third target is to double the share of renewables in the global energy mix. But does this mean double the share of every form of renewable energy or double the total share? According to a recent Intergovernmental Panel on Climate Change (IPCC) report, most of the primary energy supplied by renewables in 2008 came from biomass. However, there is a limitation to which the use of biomass can be doubled. And if the target is to be raised to 17 percent by 2030, and then to 27 percent by 2050, it would need a cumulative investment of $1,360-$5,100 billion by 2020 and $1,490-$7,180 billion from 2021-2030 in power generation alone. The numbers are mind boggling - and quite unrealistic. It is not simply future targets which appear difficult to reach. Analysis by the UN indicates that by 20 10 developed countries had provided only 0.3 percent, compared to 0.7 percent of GDP, as stipulated by the UN, of their national income as official development assistance - leaving a gap of some $153 billion. Serious attention needs to be paid to current targets, certainly before we embark on any new funding commitments. One further complication to date has the disappointing progress made in relation to technology transfer and human capacity development. And we must not forget the damaging role of agricultural subsidies in developed countries which continue to have a detrimental impact on farmers in developing countries, and which continue to impede their ability to grow. In summary, all the three energy targets mentioned in the Zero Draft of the Rio+20 appear challenging in terms of their practical feasibility and funding. We should be cautious about making further headline-grabbing announcements, about future hopes and aims, without first being honest with ourselves about the work still required to reach previous targets. I would like to conclude my talk here today by highlighting some of the steps taken by the Kingdom of Saudi Arabia. The Kingdom consistently exceeds the minimum donor requirement, 0.7 percent of GDP, as stipulated by the UN. It does this through the framework of bilateral or multilateral arrangements, targeting aid to finance the development needs of recipient countries in various sectors. The Kingdom can, therefore, speak about international aid with confidence and pride - and we encourage all developed nations to meet this minimum target. Custodian of the Two Holy Mosques King Abdullah made an historic pledge during the Jeddah Energy meeting in June 2008 and set forth several initiatives which are already beginning to bear fruit. Saudi Arabia is also taking practical steps when it comes to efficiency and renewable technology. The Saudi Center for Energy Efficiency, which was initiated by the Ministry of Petroleum, is expected to launch National Energy Efficiency Program by the end of this year. The work of the King Abdullah City for Atomic and Renewable Energy is well under way. The Kingdom has established the Designated National Authority for Clean Development Mechanism to promote carbon market credits and to encourage investments in efficiency and renewables. It is worth mentioning that the DNA has won the Showcase of the Year from the UNFCCC for its communication campaign. And there is a great deal more research and development taking place in the Kingdom in the field of Solar Energy and Carbon Capture and Storage (CCS). Saudi Arabia recognizes that bas its own challenges in dealing with energy efficiency and we do not shy away from tackling these issues. We are investing in a long-term effort to conserve energy and to reduce the environmental impact. I tell you this to emphasize the fact that we are fully committed to the energy challenges ahead. We understand the issues, domestically, regionally and internationally, and we are working hard to achieve what are difficult aims. I raise concerns about the energy goals of the Zero Draft of the Rio+20 talks because they are vital issues which need to be addressed. We must not delude ourselves. I hope that this event gives us the opportunity to consider realistic solutions and build a future where energy poverty becomes a thing of the past.