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The link to energy
Whatever piece of the human development puzzle you are passionate about - be it education, health or business development - it is fundamentally linked with energy. In schools, energy provides light for night classes and powers computers to allow multimedia learning content, in clinics, energy keeps vaccines cold and provides light for emergency nighttime procedures, and in business development, energy powers the machines for production and the communication devices for connecting to suppliers and customers.
All of these pieces of the human development puzzle feed into the Human Development Index (or HDI), a metric developed by the United Nations to measure the overall wellbeing of human populations. More than just a measure of accumulation of physical assets, the Human Development Index takes into account life expectancy, education, and standard of living (through per capita income). This is important, as human development is about the ability to pursue individual choices resulting in productive, creative lives through increased longevity and health, enriched by knowledge and higher standards of living, and the freedom to participate in communities’ and nation’s affairs.
There is strong empirical evidence linking human development to access to modern energy services. At a macro level, when countries develop, they do so in tandem with improvements in energy services. In fact, according to the United National Milleneum Development Program, no country in modern times has substantially reduced poverty without a massive increase in the use of energy and/or a shift to energy efficient economies.
Because energy is a fundamental input to education, health and business services, all themselves key components of human development, we can see the important role energy plays in improving overall quality of life. In short, energy changes lives.
This graphic illustrates the relationship between per capita electricity consumption and the Human Development Index. The shape of the curve highlights the tremendous marginal impact the first kWhs have in improving quality of life, which can in many cases justify the higher marginal cost of delivering these kWhs in less developed countries. In terms of HDI, Nicaragua ranks 124th out of 182 countries [UNDP, 2007]. In pure economic terms, Nicaragua is the second poorest country in the western hemisphere after Haiti. On the Caribbean Coast of Nicaragua, the poorest region of the country, nearly 80% of the population does not have access to modern energy services. The implications of this should be clear.
References: "Energy for All" report by the ADB, available here, and the UNDP report entitled "Energy for Sustainable Development: Linkages, Impacts and Indicators", available here.
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