Report Says “Green Growth” Projects May Not Benefit Poor
“The G-20 leaders should prioritize investments that directly address poor peoples’ needs rather than using taxpayer money to pay for huge, high-risk projects whose private sector returns rarely trickle down. In sub-Saharan Africa, where water stress is highest, decentralized infrastructure has a better track record of providing water and electricity than do large storage dams, which can worsen poverty and reduce climate resilience, and are certainly not green,” states Zachary Hurwitz, Policy Coordinator of International Rivers.
The organization’s new report, entitled Infrastructure for Whom?, calls on the G-20 leaders to change course on the controversial infrastructure strategy. The report finds that large, centralized infrastructure such as Grand Inga more often benefits energy-intensive industries than it does poor people who seek increased access to electricity, water, and sanitation, especially in Sub-Saharan Africa and South Asia BHP Billiton, Southern Africa’s leading aluminum producer, has expressed interest in the Grand Inga Dam.
A high-level report on infrastructure, prepared for the G-20 summit in Cannes, France last November, proposes using public spending to offset private sector risk for eleven large, regional infrastructure projects that it claims will boost economic growth while being environmentally-friendly, what the strategy calls “green growth.”
Yet, at least four of the recommended projects are in the hydropower and grid expansion sectors, which have traditionally suffered from high levels of risk, corruption, graft, and cost overruns.
Recent reports have signaled that new renewable technologies are approaching grid parity and will be more effective in meeting the world’s energy needs. A 2010 World Bank report found that 65 million people in Africa will gain access to safe and clean lighting through solar by 2015, while a 2012 Bloomberg New Energy Finance report stated that grid-connected photovoltaics in Africa have already become competitive. The International Energy Agency has stated that the energy needs of 70% the world’s rural poor could be met by investment in small, decentralized infrastructure technologies.
International Rivers’ report finds that the majority of rural poor live closer to local sources of renewable energy and water than to an electric grid and centralized irrigation systems. As a result, decentralized projects that address the needs of the poor directly are more effective at promoting broad-based economic growth and reducing poverty than grid expansion and construction of centralized mega-projects. Small-scale energy and water projects can also strengthen climate resilience, reduce the social and environmental footprint of the infrastructure sector, and strengthen democratic control over essential public services.
Large infrastructure lending has regained focus as world leaders search for ways to stimulate growth. The World Bank has recently indicated it will return to large infrastructure lending, having issued its own new infrastructure strategy in 2011. International Rivers’ report calls on Jim Yong Kim, who will take office as the World Bank’s new President in July, to replace the institution’s top-down approach to infrastructure with a strategy that prioritizes the needs of the poor.
The new report, Infrastructure for Whom?, is available at www.internationalrivers.org/infrastructureforwhom.
Hard copies can be requested from Kate Ross at firstname.lastname@example.org.