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Bank Policy Initiatives for the Energy Sector : Energy Policy Issues : Rural Energy Development

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Rural Energy Systems

65. Rural energy systems in the DMCs have the following common features: (I) energy consumption is dominated by the domestic sector; (ii) energy demand is determined by basic human needs rather than by factors such as choice, taste or income; (iii) traditional noncommercial energy sources are generally overexploited but rural incomes are so low that alternative energy forms are not affordable unless at subsidized prices; and (iv) social and institutional policies (which often work to the disadvantage of the poor) determine the distribution of and access to energy resources. Therefore, rural areas have a pressing need for more equitable access to energy resources and more efficient end-use technologies. The Bank is emphasizing this aspect in its rural planning activities. Such emphasis is in line with the social action program of the United Nations Conference on Environment and Development (UNCED) Agenda 21, which calls for integrating environment and development in decision making, changing consumption patterns and promoting human health.

66. The consumption of commercial fuels in rural areas, whether for domestic, transport or agro-industrial purposes, will produce the same kinds of pollution experienced in urban areas but the relative significance and intensity of the environmental effects produced is much lower. Attempts to factor the environmental impacts of the production and use of traditional fuels into the rural energy planning process need to address three problem areas. These are: (I) the impact of fuelwood consumption on deforestation; (ii) the health effects of traditional fuel utilization, especially those associated with the manner of combustion of such fuels for domestic purposes; and (iii) the interface between energy and agriculture, particularly the diversion of crop residues and animal wastes from agricultural uses to energy uses. Detailed assessments of the initial state of the rural environment and the manner in which it is likely to be affected by future patterns of energy demand and consumption therefore form an important part of rural energy planning.

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