Leapfrogging over development? Promoting rural renewables for climate change mitigation

Renewable energy technologies have the potential to help solve two pressing problems. On one hand, carbon-free energy sources must play a role in climate change mitigation. On the other hand, renewables might help meet needs of rural people without access to modern energy services. However, if renewables are deployed to combat climate change (primarily resulting from emissions in the developed economies) then providing basic energy services in the developing world may be compromised. The tendency to conflate the two drivers by installing renewables in rural areas for carbon mitigation reasons rather than for development reasons could compromise both goals. The danger is supporting sub-optimal policies for mitigating carbon and for rural energy. This is problematic given the limited funds available for energy development and reducing greenhouse gases. This paper analyzes how these goals have been balanced by the Global Environment Facility (GEF). Project documents are used to determine whether incremental costs of installing renewables were covered by GEF funds and whether the costs are comparable with other carbon mitigation options. The results raise concerns about the effectiveness and appropriateness of GEF funding of such projects and highlight the importance of post-Kyoto framework design to reduce emissions and promote development.