Rapidly growing informal settlements could be the key to sustainable urban energy system transformation

In our latest guest post, Mukesh Gupta discusses the relevance of an often overlooked aspect of global urbanisation processes – the use of energy by residents of informal settlements living in the cities of developing countries. Mukesh is currently a PhD student of the Department of Environmental Sciences and Policy at Central European University working under supervision of Prof. Diana Ürge-Vorsatz. With his PhD dissertation, he aims at estimating of the energy and carbon dioxide saving potential and associated cost of upgrading dwellings in informal settlements in Sub Saharan Africa and South Asia through the application of efficient technologies. He can be contacted through – Gupta_Mukesh@ceu-budapest.edu

Energy uses are expected to grow among populations living in informal settlements as they move out of poverty thanks to high economic growth in urban areas of developing countries.

It is evident that most of the growth in the world’s population for the near future will take place in cities and towns of the developing world. Only 30% of the world’s population was urban in 1950. Today more than half of the world’s total population is living in the cities. The trend of urbanization is global but with differing rates varied by country and regions. Today’s developed countries were mostly urban by the 1950s. However, the group of less developed countries will only reach to this level of urbanization until 2019 (Figure 1). It is projected that in around 2050, about 70% of the world’s population will be urban (UN DESA 2011). Developing countries urban growth is projected to be twice as fast as OECD countries in the 2005-2030 periods (UNESCAP, 2008).

World urban populationFigure 1: Percentage of urbanization by region, 1950-2050
Source: UN DESA/Population Division, 2011

Historically, urban growth follows the trend of economic growth. Gradually cities and urban regions’ importance are being recognized as the major engines of economic growth, job creation and innovation. Urbanization helps in reducing poverty by generating new opportunities, raising incomes and by increasing the numbers of livelihood options (UN Habitat, 2010). Conversely on the flip side, when accompanied by weak economic growth and ineffective or absent distributive policies, the outcome of urbanization is increasing the concentration of disadvantaged people living in informal settlements rather than poverty reduction.

People from rural areas migrate to urban regions in search of better livelihood opportunities. These new migrants can expand squatter settlements and shanty towns; worsen the problems of overcrowded neighborhoods, inadequate housing, pollution, and poor access to clean water, sanitation and other basic social services.

The energy consumption of developing countries has historically been lower and hence considered less important than the developed countries. However currently these countries are growing rapidly in a way their energy use is increasing considerably. Most importantly poor and near poor population (including urban poor) in urban areas of developing countries are in the forefront as they come out of poverty their energy use increases dramatically (Wolfram et al., 2012). Developed countries have already taken significant measures to increase energy efficiency but developing countries are lagging far behind in this regard especially disadvantaged people in these regions still choose inefficient energy products once they are able to afford them. Due to this reason much of the scope of improvement to reap the ‘low hanging fruit’ is in the developing countries and especially sustainable provision of energy service to the disadvantaged people in the urban regions (McNeil et al., 2008).

Urbanization process is the major driving force behind energy demand in the buildings end use sector and hence synonymous with development. With increasing economic growth in developing countries, ownership of energy using assets is increasing to provide the opportunity to benefit from more energy services such as television, refrigerator, washing machine and air-conditioning (Wolfram et al., 2012). The positive trend of increased wealth leads to higher energy and resource consumption unless it is redirected into climate friendly development. Therefore building energy efficiency and renewable efforts should be oriented towards urban areas in developing countries particularly the energy needs of disadvantaged people in the urban regions have to be met sustainably. Building efficiency criteria at the very beginning of providing access, effective energy supply is reduced significantly, the level and quality of energy services is also improved and cost minimized (Pachauri et al, 2011).

Providing a “basic human needs” level of energy services will only have a limited impact on the increase of greenhouse gas emissions. According to the International Energy Agency, providing basic universal energy services would add 1.3 % of total global emissions in 2030. However a shift towards productive uses of energy services could increase emissions considerably (AGECC, 2010). Productive uses of energy means the energy level that is required to improve livelihoods and drives economic development on a sustainable basis in the poor and developing countries. This is why a shift towards productive uses is critical: it increases end users capability to pay for energy services which is vital for sustainable financial viability of such services. This shift highlights the importance of enabling renewable energy and fast deployment of energy-efficient end use devices to reduce the amount of energy use. It is even more urgent in the context of increasing number of urban poor as they move to the productive uses of energy services with economic growth compared to their rural counterparts.

Academic community and policy makers have acknowledged the acute need and associated challenges to provide quality energy services to disadvantaged people in the urban regions in sustainable ways. However the strategies and policies to tackle these challenges are yet to be fully understood. Therefore the information which can lead to more understanding of the development of such policies and strategies are highly valuable to developing countries. The information may also provide useful insights in designing future informal settlements development policies and programs to policy makers and organizations. This information requires projecting the energy use of urban poor households and subsequent carbon dioxide emissions, sustainable alternatives exist to minimize these trends, and the achievement of energy and cost savings in realizing such alternatives.

AGECC, 2010. The Secretary General’s Advisory Group on Energy and Climate Change (AGECC) Energy for a Sustainable Future, Summary Report and Recommendations

McNeil, M.A., Letschert, V.E., Stephane de la Rue du Can,2008. Global Potential of Energy Efficiency Standards and Labeling Programs, Lawrence Berkeley National Laboratory, CLASP

Ofori, G. 2007. Clients’ Role in Attainment of Sustainability in Housing: The Case of Singapore and Lessons for Developing Countries, Journal of Construction in Developing Countries, Vol. 12, No. 2

Pachauri, S., Ürge-Vorsatz, D., and LaBelle, M., 2012. Synergies between Energy Efficiency and Energy Access Policies and Strategies, Global Policy Volume 3. Issue 2.

United Nations 2011, Department of Economic and Social Affairs, Population Division (UN DESA): World Urbanization Prospects, the 2011 Revision.

UNESCAP (2008), “The Green Growth approach for climate action” background paper for The 3rd Policy Consultation Forum of the Seoul Initiative Network on Green Growth, 18-20 September 2008 Cebu, Philippines.

UN Habitat, 2010. State of the World’s Cities 2010/2011- Cities for All: Bridging the Urban Divide; available at http://www.unhabitat.org

Wolfram, C., Shelef, O., and Gertler, P., 2012. How Will Energy Demand Develop in the Developing World? Energy Institute @ Haas WP 226

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