Summary

This perspective reviews the targets and their priorities and proposes a seventh, policy-based target. Morris believes that the chapter convincingly explains how access to modern energy resources is critical for economic development and improving the welfare of poor households. Few doubt the merits of expanding modern energy access in principle, but there remain questions about where the benefits are highest and what policies may best be used.

The targets proposed pose several challenges to cost-benefit analysis. In particular, they are mainly target levels of desirable outcomes, without specific policies to bring them about. There is also an issue of rising marginal costs as the easier sectors are served first, and finally, aggregate welfare increases may mask important underlying distributional outcomes, which calls for careful design of policies.

Although the benefits of access to electricity are great, the challenges of delivering this to all make it difficult to deliver. The more modest target of expanding access to modern cooking is likely to provide strong net benefits, particularly now that newer, better-built stoves are coming to market.

The objective of doubling the rate of decline in energy use per unit of GDP (SDG 2) does not make much sense in itself, as the energy intensity of an economy tends to shrink with economic growth as the service sector expands. That means that a more energy-efficient economy can be both a cause and an effect of development. Targeting a particular sector would make more sense, but only if there is also a specific costeffective policy proposal. As for the “energy-efficiency gap,” it is difficult to substantiate claims of a significant and pervasive gap. What are apparent benefits to society many actually negatively impact consumers, who have to pay the full cost.

Target 3 is to double the share of renewable energy. If the primary purpose is to reduce emissions of carbon dioxide and pollutants, this should be compared with other strategies. Peer-reviewed literature provides strong evidence that policies to promote renewables are less cost effective than policies to price carbon.

The benefits of reducing “pretax consumptiondistorting” subsidies on fossil fuels depend on how they were implemented and what would happen to the resources that would have been spent on the subsidies. The net result of the spending shift could be more progressivity, particularly if fossil fuel subsidies are replaced with income support and other programs targeted to the poor.