July 22, 2002—The World Resources Institute, an environmental think tank, has released a study that criticizes the way that electricity sectors are being restructured throughout the world. According to the report, social and environmental benefits could be easily discounted as rich and poor countries focus on making their power markets more competitive.
“If appropriately done, electricity reform is an opportunity to re-direct billions of dollars toward a sustainable and equitable energy future,” said Dr. Navroz Dubash, lead author of the new study, “Power Politics: Equity and environment in electricity reform.”
The report examines the electricity sector restructuring in six countries: Argentina, Bulgaria, Ghana, India, Indonesia, and South Africa. In these countries, profit alone did not provide enough incentive to reach rural customers and the urban poor. The reforms, often targeted at reducing subsidies and increasing tariffs, have also triggered social hardships and political opposition.
The report cites a World Bank study stating that by 1998, 33 percent of developing countries had passed new electricity laws, 29 percent had established an independent regulator, and 40 percent had allowed the entry of privately owned power producers.
The report finds that electricity reforms were overwhelmingly driven by narrow financial considerations. For more information, as well as the reports recommendations how to change the current reform process, contact the World Resources Institute.
