September 30, 2006

WORLDWIDE: The Poor as Producers

Who believes that the inbalance of have and have-not nations can be the basis for substantive change in the new millennium?

The BioPact unites EU citizens and African citizens who work towards a common bioenergy future, in which the EU couples part of its green energy policies to its humanitarian and development policies in Africa. We also monitor biofuels and bioenergy news coming from the developing world in general.

As the interdependence of continental ecologies throughout the world becomes more apparent, the importance of initiatives like BioPact's needs support. I remind readers of the great vision of this consortium by inviting them to read their recent article about the field of development economics and C.K. Prahalad's views as presented in his book The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Below is a mere fragment of the introduction.

The rural poor as energy producers - a critique of the "bottom of the pyramid" development discourse
from BioPact

At Biopact, our original interest in the bioenergy sector stems from professional engagements in the (poor parts of) emerging economies and from working in the field of development economics. Simply put, it quickly became apparent to us that the potential for the production of biofuels in the South offers a genuine way to tackle poverty. The simple reasoning is that:

(1) energy prices and GHG emissions costs worldwide are rising sharply (oil prices tripled in under 3 years time with no serious declines in sight for the long-term; carbon-markets are being introduced on a planetary scale)

(2) biofuels offer an immediate alternative to fossil fuels and there is an ever growing global demand for them; contrary to other renewables (like wind or solar), the energy and carbon-neutrality coming from bioenergy can be traded physically as a commodity as well as virtually in the form of carbon credits (this is important because it allows producers to play on two markets at the same time)

(3) poor farmers in the South have a competitive advantage (land, labor, climate) and can thus boost their incomes by becoming energy producers who can sell to us competitively. A simple proposition.

It is crucial that we stress this productive capacity of the poor and their ownership over it. Of the 3 billion people that live on less than two dollars a day, some 70% live in rural areas with more than half of them being farmers. With moderate capital interventions and basic knowledge and tech transfers, they can diversify into energy production over which they retain control.

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