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Credit: the Economic Impact
Recently, the Economist Impact was commissioned by the United Nations International Children’s Emergency Fund (UNICEF) to draft a report about the benefits of investing in energy resilience. This 68 page report, titled “Powering progress: measuring the benefits of investing in energy resilience for healthcare, education and water,” calls for investment in resilient energy by all stakeholders — public and private sectors, and international organisations alike.
Let’s review.
Some necessary context
Firstly, how is investing in energy resilience different from investing in other aspects of energy?
As its name implies, energy resilience examines energy reliability and its ability to resist major disruptions, such as earthquakes or floods. Energy services are vital to people’s lives, such as heating, cooling, ventilation, and electricity.
Image: the Economist Impact
According to the report, energy resilience is critical as climate disasters increasingly put energy systems to the test. More investment into energy resilience would equip facilities with energy systems that can withstand and recover quickly from shocks, and maintain necessary levels of service in the meantime.
Most of these investments are consolidated in developed countries. While this is good for developed countries, developing countries — which are usually affected more drastically by natural disasters and less able to recover — are left behind in a greater state of precarity.
All about gains
So it won’t surprise people to learn that this report examined the impact of energy resilience investment in two developing countries, Pakistan and Tanzania.
The report examines the economic and community benefits of alleviating energy poverty and increasing energy resilience in healthcare, education, and water. According to this report, investing into energy resilience in Pakistan and Tanzania could reap a 150% to 300% return in social and economic benefits.
The social benefits that emerge from such an investment come to mind intuitively. Improved access to resilient energy in healthcare facilities increases immunisation levels, and enhances adult, infant, and maternal health This investment can prevent over 175,000 deaths in Pakistan, and 111,000 deaths in Tanzania.
Image: the Economist Impact
Intertwined with social benefits are economic ones, too. Presently, nearly 200 million children attend schools without any electricity, which impedes their education. The report asserts that addressing this impediment to education would decrease dropout rates and increase students’ educational outcomes, which would then increase their future earnings. Such improvements to students’ education levels could add US$2.3 billion and US$500 million to the economies of Pakistan and Tanzania by 2040.
Image: the Economist Impact
The report also believes that energy reliability for water, in particular, would increase household savings and agricultural productivity. The increased productivity presents the opportunity for Pakistan and Tanzania to increase their economic output by US$5 million and US$150 million by 2030.
Image: the Economist Impact
A private affair
The report outlines the benefits of investing in resilient, sustainable, and green energy based on all that data.
However, developing countries usually have many demands on their public resources. Even if energy poverty is an urgent issue, and addressing it brings numerous benefits to a country, these public resources are less available to be funnelled into energy resilience.
To resolve this issue, the report advocates for greater private sector investment. Private sector investors usually avoid investing in public resources as they will have to navigate inadequate regulatory and fiscal environments, and believe that such investments bring low return.
The Economist Impact believes that all stakeholders need to be involved in addressing these issues and incentivising private companies to invest. The report asserts that regulators and policymakers should ensure their policy environment is stable, and that the public
Image: the Economist Impact
Private, public, and beyond
But no one stakeholder is responsible. Regulators and policymakers must cultivate a stable policy environment with consistent, clear regulations and policies to incentivise private sector investors. The public sector can partner with development finance institutions to offer blended finance solutions. This will enable countries to provide other incentives, like tax breaks or subsidies, which can be presented to private investors to further encourage their involvement.
Unlike what is usually associated with public resources, the report has outlined the economic returns associated with investing in energy resilience. The private sector can thus expect sufficient returns. With the stage set, the report also asks that private sector actors give back to the community by providing local capacity and knowledge building.
Overall, collaboration between various stakeholders can help meaningfully overcome the barrier that unreliable energy access poses to those who live with it.
Since the report was commissioned by UNICEF, which is dedicated to promoting the rights and well-being of children worldwide, the outcomes that the report focuses on are people and future-oriented.
The findings of the report back up UNICEF’s call for investment into energy that is resilient, sustainable and green, while also bringing the long-term benefits of a community. By involving multiple stakeholders, including encouraging investment by the private sector, the report believes that energy poverty can be properly addressed. This will help build resilient communities that drive social and economic growth to a country, and will bring a better future for the children UNICEF hopes to care for.
