Renewable Energy Policy Hurts African Poor

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President Obama’s energy policy hurts the poor by focusing on renewables, says Bjørn Lomborg, president of the Copenhagen Consensus Center.

One of the best ways to lift people out of poverty is to grant them access to cheap and affordable energy. One of the best illustrations of this is China, which has brought 680 million of its citizens out of poverty over the last 30 years through the use of cheap coal.

However, the United States and other European countries declared last year that they would not finance any plans for coal-fired power plants in developing countries.

– In 2010, the World Bank helped to finance a coal-fired plant in South Africa, but America and Europe abstained from voting for the project.
– That power plant, however, will be responsible for 10 percent of South Africa’s electricity and will help the country avoid blackouts.
– Even President Obama admitted that South Africa would suffer without a coal power plant, saying, “[E]conomic recovery will suffer, adversely impacting electrification, job creation, and social indicators.”

The benefits of coal-fired power are not limited to South Africa, and other African countries could see major benefits with increased electricity generation. As such, President Obama has launched a Power Africa initiative, intended to increase electricity and access to modern energy in six African countries.

– However, the Overseas Private Investment Corporation (OPIC), the United States’ main development finance institution, prefers solar and wind energy to coal. While it has invested in 40 new projects over the last five years, all but two were renewable energy projects.
– Renewable energy is much more expensive. According to the Center for Global Development, if the United States spends $10 billion on gas electrification, it could help lift 90 million people out of poverty. But if that $10 billion is instead used on renewables, it would help only 20 to 27 million people.
– By using renewables, the United States would be making a deliberate choice to leave 60 million people in poverty.

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