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Aid Effectiveness for Environmental Sustainability pp 125–184Cite as

Palgrave Macmillan

A Review of the Nature of Foreign Aid to the Energy Sector over the Last Two Decades

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Abstract

Chap. 5 reviews the key enabling conditions of transforming the energy system and the foreign aid policy prerequisites which will determine, to a large extent, its impacts on global climate change as well as how such systems can adapt to a context of growing energy scarcity. It is argued that support of sustainable energy, until recently, has been the stepchild of foreign aid and its efficacy has thus been questioned. The review here suggests that while there is still much room for improvement in terms of effective use of foreign aid for sustainable energy and climate protection, things have been getting better. It is also pointed out that foreign aid has been instrumental in promoting many renewables and efficiency projects that would possibly have not been implemented in developing countries without official development assistance flows.

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Notes

  1. 1.

    Organisation for Economic Co-operation and Development-Development Assistance Committee (OECD-DAC) is the forum of selected members of the OECD established as a platform for discussing issues on aid to developing countries. The forum includes the World Bank, the IMF and UNDP as observers.

  2. 2.

    Some of this data belongs to some countries (e.g. China) and some NGOs which do not have efficient mechanisms for sharing their data, and some businesses (which in practice do not share certain data due to fears of competition).

  3. 3.

    OECD-IEA (OECD-International Energy Agency) (2010: 3), ‘Energy Poverty: How to Make Modern Energy Access Universal’. Special early excerpt of the World Energy Outlook 2010 for the UN General Assembly on the Millennium Development Goals. Paris: International Energy Agency.

  4. 4.

    WEO, Modern Energy for All, http://www.worldenergyoutlook.org/resources/energydevelopment/. Accessed on April 24, 2017.

  5. 5.

    GEA (Global Energy Assessment) (2012: xiii). Global Energy Assessment: Toward a Sustainable Future. Cambridge (UK) and Laxenburg (Austria): Cambridge University Press and International Institute for Applied Systems Analysis.

  6. 6.

    GEA (Global Energy Assessment) (2012). Global Energy Assessment: Toward a Sustainable Future. Cambridge (UK) and Laxenburg (Austria): Cambridge University Press and International Institute for Applied Systems Analysis.

  7. 7.

    The lower and higher figures are provided by the World Energy Outlook, Special Excerpt on Energy Poverty and the Global Energy Assessment respectively.

  8. 8.

    Stern, N. (2007). The Economics of Climate Change: The Stern Review. Cambridge: Cambridge University Press.

  9. 9.

    International Energy Agency (IEA) and the World Bank. 2017. “Sustainable Energy for All 2017—Progress toward sustainable energy” Summary World Bank, Washington, DC.

  10. 10.

    IEA (International Energy Agency) (2011). World Energy Outlook 2011. Paris: IEA.

  11. 11.

    The Paris Agreement was reached at the 21st Conference of the Parties of the UNFCCC. It requires all Parties to declare their efforts to address climate change through their nationally determined contributions and to continue to strengthen these efforts in years ahead. It is the first time that all nations agreed to commit to such targets.

  12. 12.

    The Sustainable Energy for All initiative (www.sustainableenergyforall.org/) was launched by the UN Secretary General at the GA session of 2011. The initiative seeks to promote three goals, all to be reached by 2030: energy access for all, a doubling of energy efficiency improvements in the developing world, and a doubling of the share of renewable energy in global final energy mixes.

  13. 13.

    International Energy Agency (IEA) and the World Bank. 2017. “Sustainable Energy for All 2017—Progress toward sustainable energy” Summary World Bank, Washington, DC.

  14. 14.

    On September 25, 2015, countries adopted a set of goals to end poverty, protect the planet, and ensure prosperity for all as part of a new sustainable development agenda. www.un.org

  15. 15.

    Energy+ is an initiative of the government of Norway to promote access to energy and low-carbon development in developing nations.

  16. 16.

    These are the Intended Nationally Determined Contributions identified the actions that countries intended to take under the Paris Agreement . In their INDCs (to be converted to NDCs after the Paris Agreement came into force), countries outlined the actions they are taking to reduce GHG emissions and other climate-related action, including adaptation measures.

  17. 17.

    New York Times (2010). Editorial, ‘Cleaner, Healthier Cookstoves’. 23 September. Available at: www.nytimes.com/2010/09/24/opinion/24fri4.html?_r=0 (accessed 10 April 2013); Jolly, D. (2010). ‘Energy Access Seen as Vital to Abolishing Worst Poverty’. The New York Times, 21 September. Available at: www.nytimes.com/2010/09/22/business/global/22energy.html?ref=david_jolly (accessed 10 April 2013).

  18. 18.

    See the reports of the Global Alliance for Clean Cookstoves for examples of this attention, available at: www.cleancookstoves.org/resources/reports-and-research/

  19. 19.

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    Since its inception, The Bill and Melinda Gates Foundation made total grant payments totalling US$36.7 billion through 2015. These include programs in global development, health, policy support and US programmes. Bill & Melinda Gates Foundation. (n.d.). Accessed May 16, 2017, from http://www.gatesfoundation.org/

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  27. 27.

    http://www.oecd.org/dac/stats/energy, downloaded 15 May 2017.

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    Morgenthau, H. (1962). ‘A Political Theory of Foreign Aid’. The American Political Science Review, 56(2): 301–09.

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    Easterly, W. (2001). The Elusive Quest for Growth: Economists Adventures and Misadventures in the Tropics. Cambridge, MA: Cambridge University Press; Easterly, W. (2006). A White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. New York, NY: The Penguin Press; Easterly, W., R. Levine, and D. Roodman (2004). ‘New Data, New Doubts: A Comment on Burnside and Dollar’s Aid, Policies and Growth’. American Economic Review, 94 (3): 774–80.

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    Friedman, M. (1958). ‘Foreign Economic Aid’. Yale Review, 47(4): 501–16.

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    Sachs, J., J. McArthur, G. Schmidt-Traub, M. Kruk, C. Bahadur, M. Faye, and G. McCord (2004). ‘Ending Africa’s Poverty Trap’. Brookings Papers on Economic Activity, 1: 117–240.

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    Stiglitz, J. (2002). ‘Overseas Aid is Money Well Spent’. Financial Times, 14 April.

  37. 37.

    Stern, N. (2002). ‘Making the Case for Aid, Savings and Growth in LDCs: Some Recent Evidence’. In World Bank (ed.), A Case for Aid: Building a Consensus for Development Assistance. Washington, DC. World Bank.

  38. 38.

    Boone, P. (1994). ‘The Impact of Foreign Aid on Savings and Growth’. Centre for Economic Performance Working Paper 677. London: London School of Economics.

  39. 39.

    Burnside, C., and D. Dollar (2000). ‘Aid Policies and Growth’. American Economic Review, 90(4): 847–68

  40. 40.

    Radelet, S., M. Clemens, and R. Bhavnani (2006). ‘Aid and Growth. The Current Debate and Some New Evidence’. In P. Isard, L. Lipschitz, A. Mourmuras and P. Heller (eds), Macroeconomic Management of Foreign Aid: Opportunities and Pitfall. Washington, DC: International Monetary Fund.

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    Radelet, S. (2004). ‘Aid Effectiveness and the Millennium Development Goals’. CGD Working Paper 39. Washington, DC: Center for Global Development.

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    http://www.oecd.org/dac/stats/energy, downloaded 15 May 2017.

  43. 43.

    Multilateral financial institutions in this reference include the World Bank and the regional development banks: African Development Bank , Asian Development Bank and the Inter-American Development Bank .

  44. 44.

    One example of such an independent information source is www.climatefundsupdate.org, which regularly tracks climate change financing .

  45. 45.

    OECD (The Organisation for Economic Co-operation and Development) (2010). Better Aid: Evaluation in Development Agencies. Paris: OECD Publishing.

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    The UN Energy website (www.unenergy.org) provides a full table with a list of activities by agency in each of these areas.

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    ESMAP (www.esmap.org) has operated in over 100 countries through more than 800 activities covering a broad range of energy issues.

  48. 48.

    United Nations Industrial Development Organization.

  49. 49.

    Food and Agriculture Organization of the United Nations.

  50. 50.

    International Atomic Energy Agency.

  51. 51.

    IRENA (International Renewable Energy Agency) (n.d.). About IRENA. Abu Dhabi, United Arab Emirates: International Renewable Energy Agency. Available at: from www.irena.org/Menu/index.aspx?PriMenuID=13&mnu=Pri (accessed 11 April 2013).

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    OECD-IEA (OECD-International Energy Agency) (2010). ‘Energy Poverty: How to Make Modern Energy Access Universal’. Special early excerpt of the World Energy Outlook 2010 for the UN General Assembly on the Millennium Development Goals. Paris: International Energy Agency.

  53. 53.

    Woods, N. (2008). ‘Whose Aid? Whose Influence? China, Emerging Donors and the Silent Revolution in Development Assistance’. International Affairs, 84(6): 1–18.

  54. 54.

    The Paris Declaration was agreed in 2005 by the OECD-DAC group of donors and is based on five principles to make aid more effective: ownership by recipient countries, alignment of aid to the recipient-developed strategies, harmonization among donors, focus on results, and mutual accountability.

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    Woods, N. (2008). ‘Whose Aid? Whose Influence? China, Emerging Donors and the Silent Revolution in Development Assistance’. International Affairs, 84(6): 1–18.

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    Little, H. M. (2010). ‘The Role of Private Assistance in International Development’. International Law and Politics, 42: 101–19.

  57. 57.

    Ibid.

  58. 58.

    Practical Action , based in the UK, is one of the many development charity institutions working in the energy-for-the-poor sector.

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    Stern, E., L. Altinger, O. Feinstein, M. Maranon, D. Ruenbergerg, N. S. Schulz, and N. S. Nielsen (2008). ‘Thematic Study on the Paris Declaration, Aid Effectiveness, and Development Effectiveness’. Copenhagen: DARA, Ministry of Foreign Affairs.

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    See the OECD-DAC resources hub on aid effectiveness for more information, retrieved from www.oecd.org/dac/effectiveness/

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    UN Energy Knowledge Network (n.d.). ‘What is UN-Energy? The United Nations’ Inter-Agency Mechanism on Energy’. Available at: www.unn-energy.org (accessed 11 April 2013).

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    Lancaster, C. (1999). ‘Aid Effectiveness in Africa: The Unfinished Agenda’. Journal of African Economies, 5(8): 487–503.

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    Adaptation Fund (2012). The Adaptation Fund and Direct Access: Supporting Developing Countries in Undertaking Concrete Measures to Adapt to the Adverse Effects of Climate Change’. Washington, DC: The Adaptation Fund. Available at: www.adaptation-fund.org/sites/default/files/DirectAccessMemo29_Oct_2012_0.pdf; Buchner, B., A. Falconer, M. Herve-Mignucci, and C. Trabacchi (2012). ‘The Landscape of Climate Finance 2012’. CPI Report. San Francisco, CA: Climate Policy Initiative.

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Acknowledgement

The author would like to thank Aaron Reuben at the Yale Center for Environmental Law and Policy, Yale University, for his research assistance.

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  1. International Institute for Applied Systems Analysis, Laxenburg, Austria

    Luis Gomez-Echeverri

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    Yongfu Huang

  2. Basque Centre for Climate Change (BC3), Leioa, Spain

    Unai Pascual

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Gomez-Echeverri, L. (2018). A Review of the Nature of Foreign Aid to the Energy Sector over the Last Two Decades. In: Huang, Y., Pascual, U. (eds) Aid Effectiveness for Environmental Sustainability. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-10-5379-5_5

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