Clean Energy for Sustainable Development

As Prepared for Delivery

Thank you very much. It's a pleasure to be here at Energy Week to talk about such critical issues. As you all know, there's a lot of talk in this town about energy. A little over a month ago, President Bush issued a remarkable challenge to our country – to break our addiction to oil. Building on a long tradition of clean energy research, we are working harder than ever to develop transformational technologies that can have far-reaching benefits here in the United States , and around the world.

I want to congratulate the World Bank's team for pulling together such a great event again this year. Our energy experts have always valued Energy Week as a premier platform for pragmatic and illuminating dialogue, and this year is no different. We've had a diverse team here from the U.S. Agency for International Development (USAID), the Department of Energy, the Environmental Protection Agency, and the State Department.

I also want to thank Jamal Saghir from the World Bank and JoAnne DiSano from the UN Department of Economic and Social Affairs for co-chairing this panel. We are pleased to see that the World Bank and the UN are collaborating -- to not only create a strong event here in Washington -- but also to bring the lessons learned from this week to our discussions in New York at the UN Commission on Sustainable Development (CSD). We are particularly pleased to hear that the Bank will be cooperating with the UN to showcase some of the winners of this year's Development Marketplace competition during CSD-14 in New York .

Key Themes

When I spoke with our team who have attended these sessions, they shared with me a number of important points that have come up during this week's discussions. I'd like to reflect briefly on some of these key themes.

1. Energy is the force behind development

First and foremost, a topic that has come up again and again – including in President Wolfowitz's opening remarks on Monday – is the catalytic role that energy plays in all areas of development. Put simply, energy powers development. Energy boosts crop production, drives industry, and creates jobs. Energy moves water, brings schools into the 21st century, and lights, heats, and cools health and other facilities around the world. The challenge of increasing access to energy services is central to our pursuit of the Millennium Development goals.

And, as leaders from the G8 and a number of developing countries highlighted last year in Gleneagles, our shared efforts on energy have important benefits beyond economic and political development. The goals of poverty reduction, energy security and climate change are inextricably connected. Increasing access to modern, clean, healthy, and efficient energy services can not only help lift people out of poverty but also reduce deforestation and atmospheric emissions while at the same time improving health. What's more, when done right, the work to provide energy services can build stronger and more democratic societies by broadening participation in decision-making, empowering individuals, and making institutions accountable to their constituents.

We are putting the approach called for by the G8 leaders into practice through a range of initiatives that will foster our efforts to meet our energy objectives, including the newly launched Asia-Pacific Partnership for Clean Development and Climate.

2. Technological diversity is important

A second key point that has been underscored this week is that we will need diversity of energy resources and technology options to accomplish our goals. With 2.6 billion people still relying on traditional biomass energy sources for cooking and heating and 1.6 billion people without electricity, the needs are too great and the challenges too profound to limit our technological choices.

The entire spectrum of energy resources and technologies must play a role in supporting development. This includes conventional, advanced, energy efficient and renewable energy technologies. Each city, province, country, and region should decide what is in their own best economic, social, and resource interest and capability.

At the same time, it is essential that we all continue to work to make clean energy technologies more affordable. That is why the U.S. government has spent over $11.7 billion since 2001 to develop cleaner, cheaper, and more reliable alternative energy sources.

These investments, and others around the world, are making a big difference. For example, over the past twenty years, the cost of wind-generated energy has dropped from 80 cents per kilowatt-hour to nearly five cents. Over the same period, the cost of a grid-connected residential solar system has dropped from nearly 2 dollars per kilowatt-hour to around 25 cents.

Even as our decades of research on renewable energy technologies continue to yield significant results, we are looking ahead to those truly ground-breaking technologies that will provide power to our vehicles, homes, and businesses in the future.

In the last four years, the Administration has engaged in four international R&D partnerships – the Generation IV International Forum nuclear partnership, the Carbon Sequestration Leadership Forum, the International Partnership for a Hydrogen Economy, and the ITER Fusion Partnership. These partnerships lend new international emphasis to strategic technologies which can make a large contribution to our efforts to reduce greenhouse gas intensity and diversify the global energy portfolio.

In addition, we are pleased to have launched the Methane to Markets Partnership in November 2004. This partnership, which now includes 15 other countries and the European Commission that represent over 60 percent of global methane emissions, focuses on advancing cost-effective, near-term methane recovery to prevent its emission into the atmosphere and promote its use as a clean energy source to enhance economic growth, promote energy security, improve the environment, and reduce greenhouse gases.

3. Policy and regulatory frameworks are needed to get private sector help

Reducing the costs of the technologies is just one piece of the technology diffusion puzzle, however. We must also remain vigilant in ensuring that there are growing markets to receive these technologies and attendant energy services. This brings me to a third key point from this week's dialogues: effective policy and regulatory frameworks are absolutely necessary in order to encourage the level of private sector investment that will be needed in the coming decades. While this is clearly the responsibility of every government, bilateral and multilateral donor assistance can and must play a crucial role in facilitating such regulatory structures.

The U.S. government continues to do significant work on sector reform and capacity building throughout the developing world. From our work on normalizing energy services in poor slum areas in India to setting rules for power trading in Southern Africa to improved public participation in energy sector decision-making globally, we are working with developing country ministries, utilities and end-users to build the kind of institutional and market structures that will encourage investment in the energy sector.

Throughout these efforts, we have learned that no one model fits all circumstances. We have sought to become increasingly agile and nuanced in our approach and are increasingly relying on a variety of policy, business and finance models as we help build capacity in energy sectors around the world.

4. Innovative financing is needed

Linked to the issue of good governance, a fourth point we have heard is that innovative forms of financing and creative financial instruments are central to the increased adoption of clean energy technologies for economic growth, energy security, and environmental stewardship.

USAID continues to play a leading role in the field of innovative financing, cooperating with development partners across the globe to use foreign assistance funding to mobilize private sector financing. By issuing partial credit guarantees to local financial institutions through their Development Credit Authority, an investment of just over $10 million from USAID enabled partners to lend up to $278 million for development-related activities in 2004.

In the energy sector, for example, USAID worked with the Inter-American Development Bank, the Central America Bank for Economic Integration the Belgian Development Bank (BIO), FinnFund, Triodos, and U.S. non-profit company E+Co to launch the Central American Renewable Energy and Cleaner Production orCAREC facility in November 2004. CAREC serves as an innovative bridge to help entrepreneurs access bank loans for renewable energy, energy efficiency, and cleaner production projects. USAID's commitment of $150,000 is ultimately expected to leverage over $65 million in private project investment.

We have heard a number of important lessons learned and best practices this week. Many of the concepts put forward here will be an excellent contribution to the CSD Energy Cycle. We hope that the CSD Secretariat can incorporate some of these ideas into the non-negotiated Matrix that they are developing as an information-sharing tool for the upcoming CSD-14 session.

From Words to Actions to Results

As always, the most pressing challenge we face is to translate these concepts into action. Minister Bbumba, Uganda 's Energy Minister, reminded us earlier of the pressing need to respond to those who lack energy services.

The ultimate measure of our success is whether we deliver concrete, on-the-ground results that improve access to modern, clean, healthy, and efficient energy services. In this regard, I am delighted that Dutch Development Minister van Ardenne noted in her speech that the Netherlands has adopted a forward-leaning, results-oriented approach to the energy issue, committing itself to providing 10 million people with access to energy by 2015.

The bottom line for our efforts must be measured by specific quantifiable, and robust metrics, such as those outlined by my colleague from the Netherlands . How many people have we hooked up? By how much have blood lead levels in children decreased as a result of improved transportation fuels? These questions are essential to our dialogue on development. Answering these questions, however, is hard work. I want to thank the World Bank for an effort they undertook yesterday to convene an informal discussion on measuring impact. We hope this conversation can continue.

WSSD Partnerships and Other Initiatives Delivering Results

When we talk about concrete, measurable results, a really positive story is emerging from some of the public-private partnerships launched more than three years ago at the World Summit on Sustainable Development (WSSD) in Johannesburg .

One of the greatest successes to emerge thus far from Johannesburg is the Partnership for Clean Fuels and Vehicles, a public-private partnership involving the UN Environment Programme, the U.S. Environmental Protection Agency, and literally dozens of other government, industry, and non-governmental partners. In 2002, leaded gasoline was used in all but one country in sub-Saharan Africa . By the end of 2005, with the assistance of the Partnership for Clean Fuels and Vehicles and the World Bank, all 49 sub-Saharan African countries had stopped refining and importing leaded gasoline. When the remaining supply left over in storage tanks is exhausted, Sub-Saharan Africa will have eliminated the use of leaded gasoline.

A recent study in Jakarta , Indonesia showed that average levels of lead in children's blood dropped by half after leaded gasoline was phased out in the city. If the effects are similar in Africa , the leaded gasoline phase-out will have a remarkably positive impact on hundreds of millions of people.

Another great story emerging from the Johannesburg Summit is the Global Village Energy Partnership or GVEP. The GVEP team will lead a session later this afternoon, so I don't want to steal their thunder, but let me just say that GVEP is making important strides in developing action plans and project portfolios that will provide lights for schools, power for small industries, and connections to the Internet. GVEP partners are currently working in 26 developing countries. Three weeks ago, for example, Guatemala launched their GVEP Action Plan.

The U.S. government is a strong supporter of GVEP. Through U.S. support for GVEP and other programs, 12.9 million people have received increased access to modern energy services since WSSD.

Our efforts on the Partnership for Clean Fuels and Vehicles and the Global Village Energy Partnership are two elements of the U.S. Clean Energy Initiative launched at the WSSD. Also under this initiative, we continue our efforts through the Partnership on Clean Indoor Air and the Efficient Energy for Sustainable Development Initiative to reduce harmful indoor air pollution and boost energy efficiency across sectors.

New Initiatives in the Pipeline

The recent progress of these and other initiatives is encouraging, but the remaining challenges are still great. As these initiatives continue, we have added several other efforts to the pipeline.

President Bush's new Advanced Energy Initiative seeks to boost research and development to change the way we fuel our vehicles and power our homes and businesses. Part of this new initiative, which includes the Global Nuclear Energy Partnership, seeks to establish a consortium of nations with advanced technologies to enable developing nations to acquire nuclear energy economically while protecting against the risk of proliferation.

As you know, the United States and India recently reached an historic agreement on civilian nuclear cooperation. During his visit to India , President Bush also highlighted two more key initiatives aimed at boosting access to modern, clean, healthy, and efficient energy services. First, the President welcomed India as the first country to participate on the government steering committee of the FutureGen project. FutureGen is a public-private partnership to build and operate the world's first zero-emissions coal-based power plant that removes and sequesters carbon dioxide (CO2) while it produces electricity and hydrogen. Second, the President highlighted the new Asia-Pacific Partnership on Clean Development and Climate, formally launched in January of this year. Through the Asia-Pacific Partnership, Australia, China, India, Japan, the Republic of Korea, and the United States will work together to reduce pollution, improve energy security, and address climate change in a way that promotes economic development. Partner countries will speed the adoption of cleaner, more efficient technologies and practices in several key economic sectors. The Administration has requested $52 million in 2007 from Congress to implement this landmark initiative. The Partnership is emblematic of the focus of the discussions here over the last few days – the commitment to cooperation, implementation, and achieving meaningful results that is manifested in the hard work you all are doing.

Conclusion

I am so impressed with the passion and dedication in this room today and that has permeated all the discussions over the past few days. As we look ahead to the UN Commission on Sustainable Development's 14th session this May and to the following year of the CSD Energy Cycle, I hope that we can all continue to work together to tackle the energy challenge.