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Driving Green Jobs through Rural Renewable Energy Systems

8 May 2012


Driving Green Jobs through Rural Renewable Energy Systems
This is part of a series of think pieces reflecting on the importance of bringing the social dimension back into discussions about green economy and sustainable development.

Green growth is being touted as a way to reconcile economic growth and sustainable development. It is supposed not only to contribute to preserving or restoring the environment but also to be decent, inclusive and gender-sensitive. However, as this think piece demonstrates, there is a gap in the assessment of data and knowledge with regard to employment and labour conditions. Using a rural off-grid electrification initiative in Bangladesh as an example, the authors aim to build awareness about employment and job conditions, and suggest indicators of social dimensions. They also propose a way to collect and monitor the data. An interdisciplinary approach when planning and evaluating rural electrification projects, and tapping into the experience and networks of already existing social economic initiatives are key elements of decent, inclusive and green jobs.

Kathrin Bimesdoerfer is a consultant on energy and sustainability policy at IFOK in Berlin. She has worked for German Development Cooperation (GIZ) in the area of private sector promotion and economic reform projects in China and Laos. Carola Kantz currently works as a senior consultant on energy and sustainability policies at IFOK in Berlin. Prior to this, she taught international political economy at the London School of Economics, United Kingdom.J.R. Siegel is a Boston-based emerging technology and sustainability consultant.


Green growth is being touted as way to reconcile economic growth and sustainable development. Many scholars and development practitioners argue that the possibilities of green growth (and therefore green jobs) are not confined to developed countries and some emerging economies: developing countries can especially benefit from the synergies of mitigating the effects of climate change and sustainable job creation and growth. While the potential for new job opportunities is high, questions arise around the social dimensions of these new jobs. International institutions emphasize the importance of green jobs not only to contribute to preserving or restoring the environment but also to be decent, inclusive and gender-sensitive (see, for example, UNEP et al. 2008). Case studies within the nascent rural off-grid electricity market, however, reveal a striking gap in data and knowledge with regard to employment and labour conditions. This think piece aims to build awareness about these conditions, and suggest some indicators of social dimensions. We also propose ways to collect and monitor the data. An interdisciplinary approach when planning and evaluating rural electrification projects, and tapping into the experience and networks of already existing social economic initiatives are key elements of decent, inclusive and green jobs.

Solar home systems
This think piece focuses on rural off-grid electrification with renewable energy. Developing countries can benefit from renewable off-grid electrification for three reasons: it helps to mitigate climate change effects, electrify rural areas and drive local job markets. This technology provides an alternative solution for those rural areas that hold few incentives for private energy companies because they are remote areas characterized by low energy consumption. One prominent example of off-grid electrification is the solar home system (SHS), a technology particularly successful in Asian countries (such as Bangladesh, China, India, Nepal, Sri Lanka and Thailand). An SHS can be used for lighting or charging cell phones, as well as for small radios, televisions and fans, depending on the size of the system. Typically, it is composed of a photovoltaic module, a battery, a charge controller, wiring and switches, lights (often fluorescent) and outlets for other small-scale appliances (Mondal et al. 2010). An SHS can replace or reduce a household’s demand for kerosene (used for lamps), charging batteries (for cell phones), propane and candles.

Reducing energy poverty in rural Bangladesh
Bangladesh is a good example of off-grid solar electrification. With the installation of the millionth SHS in 2011, its off-grid solar photovoltaic sector recently passed a significant milestone. The need for SHS in Bangladesh is acute. It is one of the poorest and most densely populated countries. The country’s per capita capacity for generating electricity is one of the lowest in the world, and approximately 85 million people in the country lack access to grid-based electricity. The majority of rural Bangladeshis live in remote areas with no access to the national grid. Due to its topography, 100 per cent on-grid electrification is difficult and expensive to realize. The SHS approach therefore provides an opportunity for the country to extend electrification to rural areas at a lower cost. One crucial driving factor for the SHS sector has been Grameen Shakti, a subsidiary of the Grameen Bank, which offers microcredit programmes to make SHS available and affordable to the rural population. The growth of the SHS sector has created business opportunities both indirectly and directly for entrepreneurs across the entire value chain and employs upward of 60,000 people. The vast majority of these workers are field assistants who market, sell, install and provide maintenance services related to SHS. But there are also indirect business opportunities. For instance, the owners of an SHS increase their income by using electricity from their systems to charge other people’s mobile phones. Owners of market stalls who have an SHS at home, can not only sell food but also electricity to their customers and other stall owners (see Siegel and Rahman 2011).

Social impact assessments are often lacking
Bangladesh is just one example, among a number of developing countries, supporting rural electrification programmes with renewable energy. International development institutions, such as the World Bank, the United Nations Development Programme (UNDP) and bilateral donors, have launched rural electrification projects. Yet, while national and international institutions emphasize the potential for creating green jobs, they do not monitor the changes in the labour market and its social dimensions. When looking at a range of off-grid electrification programmes, a number of questions remain unanswered.
  • What is the total number of jobs created?
  • What is the quality of the new green jobs?
  • What types of jobs are created (full- or part-time, home working, working in the field, and so on)?
  • Do green jobs provide new opportunities for the unemployed?
  • What are the effects on gender?
  • What are the potential unintended consequences of the new industry (for instance, how does it affect small-scale informal vendors who sell fossil fuels, such as kerosene)?

Current approaches to electrification projects do not account for the impacts on job creation, employability and entrepreneurship within the industry and focus too narrowly on increasing access to electricity. Often, the impacts of the service provision of electrification, the social dimensions of job creation, job quality within the industry, the impacts on income generation, and poverty alleviation through the industry itself are not aligned. Rural electrification programmes mostly measure project objectives by the number of systems installed, the amount of newly installed capacity and the training of new staff. Thus, an opportunity is missed within current projects to assess, monitor and understand the effects on social dimensions of the emerging green industry sector.

In order to spur private sector investments, it is widely recognized that there is a need for more market information and data at the base of the pyramid. While there are initiatives to collect consumer data and test business models, little has been done to assess the dynamics within the supply chain and sector. A recent report from the Renewable Energy Policy Network for the 21st Century (REN21) noted that “statistics on renewable energy use in rural areas of developing countries are not being collected systematically” (REN21 2011: 65).

Recommendations
Based on these observations, we suggest that the assessment of social dimensions should be integrated with the goals of existing rural electrification programmes and initiatives. It will therefore be important to build awareness and capacity to understand employment dynamics and labour issues and to develop a catalogue of indicators and measures. These should include tools for assessing:
  • jobs created within the sector;
  • business performance indicators of SMEs in the off-grid energy sector;
  • workforce dynamics and quality of jobs created in the sector and the demand in training, standards, regulations and monitoring; and
  • the social effects of these jobs, such as their gender dimension, to understand local labour dynamics and ensure that certain groups will not be marginalized and discriminated against due to new activities.

Technical assistance should:
  • continue to invest in business incubators and business plan development for SMEs in the off-grid energy sector, promote inclusive business and support vocational and managerial training. It is key to “characterize the alternative/renewable energy sector as entrepreneurial at its core. People in this sector are not just focused on technology; they are developing innovative business models” (ESMAP 2010);
  • foster the potentials for new job creation by capacity building programmes for unskilled rural workers to quickly adapt to needs in the markets (jobs in the supply chain);
  • follow an integrated approach to electrification and local SME promotion and business development in the energy sector; and
  • promote social dialogue to generate information on the working conditions in the sector and develop policies to mitigate negative and unintended consequences.

Developing countries increasingly consider rural electrification with renewable energy as an opportunity to improve livelihoods and mitigate climate change. The growing solar industry in Bangladesh demonstrates that off-grid electrification offers diverse new business opportunities for the rural population. There is, however, still a need to accurately understand the economic and social impacts of the development of a rural green energy economy, especially regarding entrepreneurial activities and gender dynamics. This understanding is crucial, as it will contribute to reducing possible negative side effects, such as poor labour conditions, economic dependencies and gender discrimination.

References
ESMAP (Energy Sector Management Assistance Program). 2010. Summary Report. Fighting Poverty through Decentralized Renewable Energy, Energy SME Conference, Phonm Penh, Cambodia, 6–7 April 2009.

Mondal, M.A.H., L. Kamp and N. Pachova. 2010. “Drivers, barriers and strategies for implementation of renewable energy technologies in rural areas in Bangladesh – An innovation system analysis.” Energy Policy, Vol. 38, No. 8, pp. 4626–4634.

REN21 (Renewable Energy Policy Network for the 21st Century). 2011. Renewables 2011, Global Status Report. REN21, Paris. www.ren21.net, accessed in March 2012.

Siegel, J.R. and A. Rahman. 2011. The Diffusion of Off-Grid Solar Photovoltaic Technology in Rural Bangladesh. Energy, Climate, and Innovation Discussion Paper. The Fletcher School, Medford, MA.

UNEP (United Nations Environment Programme), ILO (International Labour Organization), IOE (International Organisation of Employers) and ITUC (International Trade Union Confederation). 2008. Green Jobs – Towards Decent Work in a Sustainable, Low-Carbon World. Report produced by Worldwatch Institute and commissioned by UNEP, ILO, IOE and ITUC, Nairobi. www.unep.org/labour_environment/features/greenjobs.asp, accessed in March 2012.

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This article reflects the views of the author(s) and does not necessarily represent those of the United Nations Research Institute for Social Development.