Rockefeller Foundation President Lays Down
Solar Energy Challenge
We have seen the emergence of a global econ-omy, where capital
and microchips rocket around the world, changing the landscape
of investment, opportunity, wealth, and insecurity in the nation-states
whose feeble, outdated borders and laws these flows sweep over,
under, and around.
How did it come to pass that there is so much wealth and yet so
many are poor at the same time? How is it that we have instant
telecommunications but are so out of touch with our own environment?
Why are we so powerful for evil, so weak for good? So numerous
and yet so alone? So well informed... and yet so uncertain? Why
do we seem to share so little common purpose... when we share
so much common ground?
During this autumn's madcap boisterous, rollicking, contumacious
electoral contest we will not hear - believe me - many serious
words uttered about climate change.
So let us have our conversation today knowing that we will have
to return to the real world, acknowledging to each other that
the human enterprise on the planet we inhabit is accelerating
along a path which, figuratively, leads off a cliff into an immense
abyss which we can barely fathom.
Why such a stark metaphor?
Here is why.
We humans are growing in number, and the amount of grain and
grain-equivalent it takes to meet our demand for food is growing
even faster. We do not know how we will be able to meet that demand
over the long run. I personally believe that the food squeeze
will come sooner, rather than later, and that we will see advance
tremors of it in the next few years. But even if you disagree
with that, and there are many who do, there is no one on this
planet who can tell us how to produce, year in and year out, 3
1/2 - 4 1/2 billion metric tons of grain-equivalent by the year
2020.
Then there is energy. If we generate and consume energy on a
global scale the way we do now in the North, we will all choke
ourselves with waste and poisons, and climate change will accelerate
probably sharply.
The butterflies are trying to tell us this already. The insect
known as "Edith's checkerspot butterfly" is especially sensitive
to subtle climate change. It has become one of the first biological
barometers of climate change: it's been dying in Mexico and multiplying
in northern California.
There are other aspects of the path we are on now that are not
sustainable, but population, food and energy form an iron triangle.
The path we are on runs right into the jaws of that iron triangle.
One of these jaws is climate change.
We're hooked on junk food - fossil fuel. It tastes good and it's
killing us.
And what's amazing is that there are substitutes. There is a
choice.
Will there be climate change?
Absolutely.
Why?
Because it is not conceivable, either staitstically or intutitively,
that the impacts of all the wastes that we are releasing into
the biofilm will be neutral or positive.
I do not know whether things will get colder or hotter, whether
the sea will rise or fall, whether there will be more desert or
more tropical vegetation. I do fear that more fisheries will be
depleted, that more arable land will be exhausted, that water
will be less potable and less available, and that air will get
more noxious.
But what I absolutely do not believe, and will not take
the risk of hoping, is that in this great, mindless, untended
and unintended experiment, we lucky old human beings will wake
up one day and find that our massive injections of the wastes
of our civilization into the biofilm will miraculously make its
intricate, beautiful and mysterious dynamic healthier, more benign
and more durable.
As we try to find, together, the path to sustainable development,
we are on the threshold of an important choice now. The issue
is renewable energy, and solar is the breakthrough point.
We know there are two billion people who don't have electricity
- and they want it.
How they get it has enormous consequences for all of us.
We know that the process we call development, the tool we call
energy and the setting we call environment are inextricably bound.
We know that the purpose of development is to let people improve
their lives - and that it takes energy inputs to improve your
quality of life. It takes energy to be productively employed.
It takes energy and it will take lots more energy for most
of the people in the world to improve their lives. Let's not pretend
otherwise.
But the fossil-fuel juggernaut combined with the desire of major
states such as China and India for economic autarky means there
are hundreds of conventional thermal stations on the world's drawing
boards with dozens of giant utilities and independent power producers,
and thousands of suppliers and con-tractors, lobbying to build
them. Finan-cial institutions, both private and pub-lic, stand
ready to finance them. This vast machine could clank on for decades.
We are an amazing species. We finally figure out that we are
really screwing things up big time. Yet we sit here with a whole
new vocabulary of polite pettifoggery - no regrets, incremental
cost per ton of carbon, climate abatement strategies, carbon stability
at 1990 levels ... perfectly comfortable creating a new industry
dealing primarily on the margins of the problem ... absolutely
impervious to the actions of the past ... content to pretend that
a North American's 7.8 metric tons of oil equivalent burned each
year is a less appropriate starting point for the future than
an African's one-half ton.
Wrong. That's flat earth thinking.
Many of you understand that the present energy paradigm has -
excuse me - run out of gas. We think it is cheap and indispensable,
yet at every opportunity we confuse present cost with future cost.
Our high-power investment firms are so sophisticated about net
present value ... why aren't they as savvy about future costs?
When will we learn to apply the concept of present value to quality
of life? to the opportunity or the destruction our children will
inherit?
We do not know exactly what the energy paradigm of the future
will look like. But we can and must begin making choices and adapting
now.
I believe it is time to choose solar. A substantial part of the
future can rely on commercially sound, technically reliable solar.
I believe the price is right. Perhaps not in the US market today
- but in rural, unelectrified, developing markets, it is affordable
right now. And that's where most of the two billion people who
want electricity are.
What is affordable?
Come with me to the Dominican Republic where it has been proven
that with the right financing mechanism, solar energy can be brought
to the rural poor on an unprecedented scale. A for-profit company
has figured out a way to deliver household PV systems to villages
on a monthly leasing basis.
A solar home system typically costs about $500 (US) - spread
that over five or six years and the cost can be as low as eight
dollars a month.
Let's remember what we've learned in the field of microenterprise:
the poor are good credit risks. Look at Grameen. Look at Accion.
Now compare those eight dollars a month to the money - as much
as $10 a month - the same family currently spends on energy like
candles, kerosene, and dry cell batteries. And compare this to
the much higher cost that would be spent by them or for
them on power from the grid under the conventional thermal model
- if the grid was extended to them. But what makes the
old model unfeasible is the cost of the grid. No utility connects
the rural poor unless it is heavily subsidized; when they
do connect, the kilowatt-hours can be much more than two to three
times more expensive than the ones produced by PVs.
I believe the technology is viable and reliable.We can expect
improved modular and cost-effective manufacturing processes, lower
unit costs, and simpler as well as more sophisticated applications.
But in its present state, PV is strong enough to bet on.
Today.
And we can expect to see the price driven down even lower
than the price of conventional thermal power sources, without
the environmental problems caused by them. The price of PV modules
has decreased by approximately 20% for each doubling of the number
of units produced in the past two or three years.
I believe the barrier to choosing solar is implementation and
service systems, not technology.
The main problem is no longer R&D. It is implementation ... market-driven
implementation. What we need now are effective delivery systems
for the product on one hand and the credit and servicing on the
other. Old-fashioned, channels of distribution.Several years ago
the RF formed a small, lean, agile subsidiary which prepared and
funded startup costs for renewable energy projects throughout
the deceloping world. It's a fascinating model. With core funding
of a few million dollars a year, it has helped to develop and
acquire capital financing for over two dozen projects woth $800
million. More important, it has helped to demonstrate the viability
in technical and commercial terms of village level solar energy.
Connecting two billion people is a challenge of implementation,
not invention. Entrepreneurship, market forces, channels of product
distribution and credit systems - this is the vocabulary of implementation.
The history of a solar century will be writte in the language
of commerce, as well as technology.
We have to rapidly expand the off-grid solar which has been shown
to work in regions of Kenya and Morocco, South Africa, Mexico,
India, and Zimbabwe, China, and throughout Central America and
the Caribbean. Both small, village-level efforts, and larger,
megaprojects, like the Enron-Amoco project in Rajasthan. And we
need to promote on-grid projects tapping the range of solar technologies,
because solar is not some micro-niche. Even in the US electricity
generated with renewable, PV systems feeding into electric grids,
and biomass from agricultural residues or energy plantations,
are making strides. What do we have to do to get on this eminently
sensible path - and to get off the fossil fuel juggernaut?
First scientists have to talk to scientists. Science is the lingua
franca. Scientists are the international community whose judgments
- over the long haul, imperfect and incremental as they are -
are the strongest, long-range influence on our decisions about
the technical dimen-sions of our large social decisions. Eventually
their shared perceptions creep out and infect government policy
and public opinion.
But we need something that goes a little faster and a little
farther than a twenty-year program of informal seepage. So what
I suggest is a focused set of colloquia among the leading climate
and energy scientists, key government policymakers and private-sector
leaders from the following countries: China, India, Indonesia,
South Africa, Mexico and Brazil. I would imagine the colloquia
being structured as follows: an international team of scientists
and policy experts would prepare the case for solar for each country
on scientific, economic, equity and development grounds. They
would than hold a series of meetings with key scientific and government
leadership of those countries to talk and work through the solar
vs. fossil issue in the country's development plans. The Rockefeller
Foundation is willing to make available its conference center
at Bellagio in Italy for such a series of conferences if that
will facilitate them.
Second, the multilaterals have to get on board. Chief among these
are the World Bank, the Inter-American Development Bank, the Asian
and African Development Banks. It is time for multilateral decision-makers,
especially in the World Bank, to say they will no longer lend
for conventional fossil-fuel plants. Such loans contribute to
a non-sustainable future; they are all too financeable in the
conventional capital markets; but do not advance the goals of
equity and development of the poor as much as a village-level,
solar energy franchise system would. The real job of the Bank
is to use its loans and its underwriting standards to nudge and
cajole the commercial markets, to show the way to the new paradigm,
with its dimensions of fairness and environmental sustainability.
Third, government leaders - who shape government policy, who
influence the allocation of resources, who guide public opinion
- need to begin paying attention to this. But there has to be
more than that. The US and OECD countries have to get on board
in practical, effective ways. And we have to reach business leaders
around the globe, particularly in the multinationals.
We have work to do to define and pursue the path to sustainable
development.
We will seek a path to a world in which we learn to close the
gap between suffering and waste, and yet live in balance with
the earth, our host. We will seek the path to a world in which
material resources flow from those who have prospered to those
who struggle to survive - not the other way round. We will seek
the path to a common ground which allows us to safeguard and to
leave for all children of the earth an inheritance of tall forests
and clear water and clean air and fertile land as full as that
we received from the generation before us. These paths are one
path, not only one of hope but of necessity. The generation to
which you and I belong will be judged finally - by our children,
by history - by whether we can find and follow that path.
You and I do not know today how all this will come out. I cannot
tell you and you cannot tell me whether we should be pessimistic
or optimistic.
Whichever camp you belong to, of this I assure you: the road will
be long and hard, sometimes unnerving. And I have the feeling
that we are only at the beginning of it.
