Let there be light: A multi-actor approach to alleviating energy poverty in Asia

Belinda Spagnoletti a,b,*

Terry O’Callaghan a

a Centre for International Risk, School of Communication, International Studies and Languages, University of South Australia, Australia

b The Nossal Institute for Global Health, Faculty of Medicine, Dentistry and Health Sciences, The University of Melbourne, Australia

Keywords: Energy poverty, corporate social responsibility, multilateralism

* Correspondence to: The Nossal Institute for Global Health, Faculty of Medicine, Dentistry and Health Sciences, The University of Melbourne, Australia. E-mail address: bspagnoletti@student.unimelb.edu.au

Abstract

Energy poverty is the primary energy security issue impacting almost 800 million people,

particularly women and children, in the developing countries of Asia. Current trends indicate

that should there be no change to existing policies, and the governance systems and

institutions underpinning them, the absolute number of energy poor will barely shift. Most

significantly, addressing energy poverty is critical to absolute poverty reduction, enhanced

gender equality and political stability in the Asian region. We offer a solution to progress the

energy poverty alleviation effort focused on encouraging sustainable, development-centred

investment. This will involve multi-actor partnerships between developed and developing

country governments, investors, and multilateral institutions. We propose that there may be

spill over effects for investing firms, in the form of strengthened corporate reputation.

Consequently, energy poverty alleviation efforts can create new opportunities for commerce,

multilateral institutions, NGOs, and developing and developed countries. It is envisaged that

the multi-actor approach put forward by this paper will facilitate the partnerships, programs

and provisions needed to alleviate energy poverty in Asia. However, critical to the success of

this collaborative approach is a genuine shift in sentiment from the key stakeholders involved

in the effort.

1. Introduction

This article is conceptual in its form, and contributes to the energy poverty literature by

proposing a multi-actor approach to the Asian energy poverty alleviation effort. The

approach we propose is ideologically aligned with the Asian Development Bank's (2011a)

drive to ‘maximise energy access for economic and social development'.1 The persistence of

energy poverty in the region, which has grown economically at a remarkably rapid rate, is

indicative of the difficulties and complexities associated with solving the problem. This paper

is centred on the notion that effective multi-actor partnerships are ultimately critical to

addressing energy poverty in Asia. Such partnerships would likely include firms,

governments and their agents, multilateral institutions and non-governmental organisations

(NGOs). However, a business-as-usual approach from these parties will not ensure efficacy,

and there are important ideological transformations that will need to be pursued to enable

successful outcomes.

1 As part of the ADB’s Energy for All initiative. See ADB (2011a).

The next section provides a background to the problem, highlighting the prevalence of

energy poverty in Asia. We examine the vast inequalities stemming from energy poverty,

including the extent to which it disproportionately impacts women and children. Underpinned

by the premise that developing countries will commit to improving their institutional capacity,

the third section considers the capacity building role that developed countries with regional

interests can play, including foreign aid agencies, public servants working in infrastructure

sectors, and higher education providers. We propose bilateral partnerships between

developing countries and developed countries that can help to advance institutional capacity

building, through sharing knowledge and technical skills. The fourth section considers a

fresh take on traditional public–private partnerships (PPPs). Assuming host governments will

commit to capacity building that contributes to effective institutions, it challenges

multinational corporations (MNCs) to reconsider their investment motivations. The growing

importance of a strong corporate reputation should motivate firms to engage, and we

highlight the likely reputational benefits. However this effort must be shared among the other

key stakeholders, including governments and their agents, multilateral institutions and

NGOs. The fifth section discusses the coordination, surveillance and reporting role that key

multilateral institutions need to have to encourage participation and contribution from MNCs

and developed and developing country actors. Engaging these stakeholders through

formalised mediums helps to mobilise the energy poverty alleviation effort beyond the realm

of national borders, culminating in regional and international collaboration. The final section

discusses the potential for cooperation between firms and NGOs to augment energy poverty

alleviation efforts. We envisage opportunities for NGOs to enhance MNC collaboration with

host governments, while still assuming an advocacy role for those who are marginalised by

energy poverty, in particular women and children. We conclude by summarising the

framework for multi-actor cooperation to alleviate energy poverty in Asia put forward by this

paper. We also discuss potential areas for future investigation, in particular robust country-

level analyses that highlight the extent to which energy poverty impacts each country in the

region and the political, cultural, economic and geographical factors at play. By undertaking

such analyses, specific NGO expertise and existing community-level responses will come to

the fore, something that we could not consider in a paper of this nature. We envisage this

intelligence will facilitate our proposed multi-actor approach to alleviate energy poverty in

Asia.

2. Background

Energy is an integral part of modern society. It is central to productivity and development,

underpinning the expansion of infrastructure, the production of goods and services, and the

provision of healthcare. At the most basic level energy enables households to be

maintained, meals to be prepared and children to study in the evenings; tasks which

predominantly impact women and children in the developing world.22 Reddy et al. (2000, p.

44) define energy poverty as ‘the absence of sufficient choice in accessing adequate,

affordable, reliable, high-quality, safe, and environmentally benign energy services to

support economic and human development'. Despite its centrality to modern life, access to

energy is not universal. In many developing countries energy poverty impacts the capacity of

communities to escape from poverty, and women and children are disproportionately

burdened. Households lacking access to adequate energy services typically rely on the

traditional use of biomass fuels for everyday needs such as cooking and heating, posing

considerable respiratory health risks.3 The problem of energy poverty is therefore two

pronged, namely: (i) access to modern and reliable electricity services, and (ii) access to

clean cooking equipment. Currently 1.4 billion people, approximately one-fifth of the world's

population, lack access to electricity while 2.7 billion people, more than one-third of the

global population, rely on the traditional use of biomass fuels (IEA, 2011a and IEA, 2010b).

Recent projections indicate that by 2030, in the absence of targeted policies, the number of

people relying on traditional biomass will increase to 2.8 billion, while those lacking electricity

access will decrease by only 200 million, to 1.2 billion people (IEA, 2011a, p. 9).

The persistent use of traditional, solid fuels to meet energy needs, as illustrated by Table 1,

has significant implications for human health and wellbeing in Asia, contributing to mortality

rates and disease burden. While the use of solid fuels is on the decline in urban areas of

most Asian countries, it is startling to note that in 14 of the 16 countries listed in Table 1

between 70 and 90 per cent of rural populations rely on the use of solid fuels. According to

the World Health Organization (WHO), the use of biomass is the cause of over 400,000

premature deaths per year in India, and most of these are women and children (in IEA,

2007, p. 582). Moreover, acute respiratory infections (ARIs), caused by exposure to indoor

air pollution from the inefficient use of biomass, contribute approximately one-ninth towards

India's national disease burden, and are one of the main causes of death in children under

2 Recent statistics on gender and work indicate that there is a substantial disparity between women and men in terms of time spent completing domestic duties in the developing world. This disparity also exists in the developed world, but the gap is less pronounced. In Asia women spend almost five hours per day doing domestic work, while men spend less than 1.5 hours per day on domestic work (UN DESA, 2010, pp. 100–101).

3 In the context of energy poverty, the term ‘traditional use of biomass’ refers to the technologically archaic equipment being used, such as unventilated or inefficient stoves, rather than the actual fuels being consumed.

five years of age (IEA. 2007, p. 582). ARIs in India represent the largest single disease

category in the world. In China, where coal use is widespread, cooking on open fires or

simple stoves can lead to lung cancer in women (WHO, 2005). According to UN DESA

(2010, p. 147) the level of smoke pollution varies depending on the energy source. It is

virtually non-existent with electricity, while it is medium for gaseous and liquid fuels. Solid

fuel combustion emits high levels of harmful pollutants, including carbon monoxide, nitrogen

oxide, sulphur oxide and benzene. Adequate ventilation assisted by chimneys or hoods is

critical to preventing the release of these pollutants into the home (UN DESA, 2010, p. 147).

INSERT TABLE 1

Women and children are more adversely impacted by energy poverty than men are. Women

are primarily responsible for preparing meals in most cultures and they can spend from 3 to

7 hours near the stove each day, depending on the complexity of the local cuisine (WHO,

2005). In Laos, wherein 84 per cent of households use an open fire or stove without a

chimney or hood and rely on solid fuels to meet their energy needs, a woman will spend 54

minutes per day cooking, on average, while a man spends just 6 minutes cooking daily (UN

DESA, 2010, p. 150). In Bangladesh, a teenage girl spends two and a half hours in the

cooking area daily and a woman spends almost 4 hours in the area. At the same time, a

teenage boy spends less than 20 minutes in the cooking area daily and a man spends less

than 15 minutes in the area (UN DESA, 2010, p.150). As a consequence girls and women

are more susceptible to the health threats outlined above, and they represent 59 per cent of

annual air pollution-attributable fatalities (WHO, 2005). Infants and young children of both

sexes typically accompany their mother while meals are being prepared and, as a result,

children under the age of five years represent 56 per cent of indoor air pollution-attributable

deaths each year (WHO. 2005).

Access to electricity has a significant impact on the ability of children to study at night time,

and this impact on literacy reverberates throughout the family. Saghir (2005, p. 7) found that

the probability that a woman from rural India will read is strongly correlated to electricity

access. In households that lacked electricity, he found that little or no reading took place

while households with electricity had higher levels of literacy, regardless of income level

(Saghir, 2005, p. 8). Energy poverty also represents a massive time and safety burden for

women and children, impacting their ability to engage in activities that generate income,

advance education and enable community participation. Women and children spend much of

their time collecting fuel wood to meet domestic energy needs, a hindrance referred to as

‘time poverty’ by the United Nations Economic and Social Commission for Asia and the

Pacific (UNESCAP) (2006, p. 12). In communities where street lighting is less prevalent or

non-existent safety concerns may prevent women and children from leaving home

unaccompanied in the evenings.

The pervasive energy poverty that burdens Asia has a deleterious effect on achieving

development and productivity goals. Approximately sixty per cent of the world's population

that lack access to electricity live in the region, representing nearly 799 million people (Table

2). The vast majority live in India, wherein approximately 404 million people lack access to

electricity. High populations of energy poor also live in Bangladesh, Indonesia, Pakistan,

Myanmar and Afghanistan. Furthermore, seven countries in the region have electrification

rates of less than 50 per cent. Myanmar performs most poorly, with an electrification rate of

13 per cent. It is followed by Afghanistan (15.5 per cent), Timor-Leste (22 per cent),

Cambodia (24 per cent), Bangladesh (41 per cent) and Nepal (43.6 per cent). Four of these

countries, Afghanistan, Bangladesh, Myanmar and Nepal, are considered to have low levels

of human development (see Table 2). Consequently, the region and the countries within it

need to act: it is a problem that compromises both human security and energy security, and

it makes the Millennium Development Goals impossible to attain.

INSERT TABLE 2

A regional history blemished with failed, disreputable ventures involving foreign investors

has prevented the flow of greatly needed investment into energy infrastructure.4 Developing

countries in Asia need to pursue a commitment to enhancing their institutional capacity in

order to regain investor confidence. The ultimate goal here is for developing Asian countries

to have the capacity to manage new energy infrastructure projects and allied energy poverty

alleviation programs successfully. This is just the first step of a highly collaborative approach

to energy poverty alleviation suggested by this paper. We argue that the opportunities and

4 These include, but are not limited to, the Bataan Nuclear Power Plant (BNPP) in the Philippines, the Dahbol power project in Maharashtra state, India, and CalEnergy’s geothermal projects (Patuha and Himpurna), the Paiton I and II projects and the Karaha Bodas project, all in Indonesia. On the problems associated with power projects in Indonesia see Wells and Ahmed (2007).

benefits emanating from a multi-actor effort are vast, with the potential to add value for each

of the actors involved. The key element to this success, though, is a genuine commitment to

alleviating energy poverty and a willingness to cooperate with stakeholders that uphold

diverse goals. The following section looks at how governments from the developing

countries in Asia, and from industrialised countries worldwide, can work together with the

goal of achieving the increased investment needed to alleviate energy poverty in the region.

3. Government partnerships that build institutional capacity

There is perceived to be a great gap in the capacity of developing Asian governments to

manage the various aspects of complex projects and programs. Unless this is remedied,

barriers to attracting the capital required to develop adequate energy infrastructure will

persist. Host governments need to instil confidence in prospective investors; they must build

their institutional capacity. In Douglass North's. (1990, p. 3) widely cited definition of

institutions, he describes how the formal and informal ‘rules of the game in a society’

constrain and shape political, social and economic exchanges. Extending this definition,

Kirkpatrick et al. (2006, p.149) explain the mechanisms of a favourable institutional

environment. A ‘good’ institutional environment is one that establishes an incentive structure

that reduces uncertainty and promotes efficiency, thereby contributing to stronger economic

performance. Included in this institutional structure are the laws and political and social

norms and conventions that are the basis for successful market production and exchange.

Public sector capacity building is the crucial first step to enriching existing institutions. This

involves bridging the technical knowledge gaps of the public sector workforces, by up-skilling

existing members and adequately preparing future cohorts. This need presents an

opportunity for governments of developing and developed countries, and their agencies, to

form education partnerships. The role of industrialised countries should not be understated

here. They have the capacity to transfer knowledge and best practice to institutions in the

developing world, and they should do so: it is arguably their responsibility as the self-

proclaimed leaders of development and modernisation.

The knowledge gap that exists in public sectors throughout developing Asia impedes the

development of institutional capacity. In the absence of a capacity building intervention, the

problem is perpetuated throughout public sector ranks. In the wake of the Asian Financial

Crisis, Malhotra (1997) proposed a series of reforms critical to enabling private sector

investment into Asia's power sector, including the institution of transparent and competitive

tendering processes, risk-sharing and steadfast government guarantees. More recently,

Tully (2006, p. 544) made a case for sustainable energy tariffs that reflect the actual costs

associated with energy service provision, while not being so high as to preclude the energy

poor from access. He also warned that subsidies, particularly those that encourage the use

of fossil fuels, should be temporary measures employed only where they are socially

desirable, transparent and targeted. These examples are representative of the strong

competence of economics and public administration vital to public sector success, and the

policy that flows from it. Knowledgeable public servants are the building blocks of an

effective public service, equipped with the capacity to shape strong institutional performance.

There is a great opportunity for industrialised countries to assist in equipping public servants

and policy makers with the skills they need to effectively manage their engagement with

energy infrastructure development and the provision of energy services. Fundamental to the

success of such partnerships is an ongoing commitment from developing Asian

governments to grow institutional capacity through public sector capacity building. This is the

first step depicted in Fig.1. The second step involves a contribution of resources and

knowledge from developed countries to: (i) develop new capacity, and (ii) enhance existing

capacity. New capacity is developed through the availability of scholarships to study abroad

in areas synonymous with public sector performance, through a scheme similar to the

AusAID administered Australia Awards Scholarships Program. However, these opportunities

would be available to students at undergraduate and postgraduate levels for the full duration

of their degree programs, and they would be restricted to courses that complement the

energy poverty alleviation effort, such as engineering, economics, international business and

public policy. As part of their studies abroad, students would undertake two placements in

the energy services sector over the duration of their degree program; one in government and

another in industry. As the third step of Fig. 1 indicates, upon graduating, students would

have a paid position in the public sector of their home country to return to, in a role focused

on energy poverty alleviation. Meanwhile, to enhance the capacity of existing public sector

employees, developed country governments would support the creation and delivery of

appropriate training programs through a scheme similar to AusAID's Government

Partnerships for Development Program. This program would be targeted at public servants

who work with or within the energy sector, and would be formulated and delivered by

developed country government representatives in conjunction with university scholars,

allowing for applied and theoretical topics to be addressed. This has the potential to

generate further opportunities for university academics, increasing their interaction with the

international community beyond the academy, providing them with a degree of global

engagement that will inform future teaching, research and service activities (Knight, 1994).

INSERT FIG. 1

It is envisaged that through the bilateral capacity building partnerships outlined here,

developing countries will have the ability to attract new FDI into energy infrastructure

development, the possibilities of which we discuss in the subsequent section.

4. Do more than profit: invest in energy infrastructure development, reap

reputational rewards MNCs can and should do more than generate profits that benefit their shareholders and

executives; as Lodge, (2002, p. 15) argues ‘[w]ith backing and financial contributions from

governments, multinational corporations have it in their power to become the world's most

effective means for reducing poverty.5 These powerful actors have the capacity to contribute

positively to the societies in which they operate, and the expectation that they will do so is

growing. As Jain and Vachani (2006, p. 6) argue, MNCs ultimately exist at the will of

communities. At the height of their success MNCs occupy positions of power and influence,

they are praised for their contributions to economic development, productivity and

internationalisation, and they have access to vast resources. But MNCs can see their laurels

fade rapidly: the ongoing reputational woes that have punctuated the success of agricultural

biotechnology giant Monsanto are a case in point (Firestein, 2006; Miles et al., 2006; Robin,

2008; Pearce, 2009). Moreover, the impact of the reputational blows that have plagued BP

since the Gulf of Mexico oil spill in 2010, and Toyota since the 2010 road deaths caused by

faulty car parts, are still being felt by both companies (Werdigier, 2011; Chazan, 2011;

Ohnsman and Kitamura, 2010; Cato, 2010). These cases demonstrate that corporate

reputation is more than a tangible concept: it is an increasingly important asset in the

modern, highly competitive, internationalised marketplace.6 In the last decade, firms have

turned to corporate social responsibility (CSR) as a means of enhancing their reputations,

championing programs that demonstrate a commitment to social or environmental causes in

addition to their core profit-making activities (Zadek 2001; Holliday et al., 2002; Zadek 2004;

Vogel 2005). Chevron's pledge to contribute $55 million to The Global Fund to Fight AIDS,

5 The prominent proponent of free market capitalism, Milton Friedman (1970), diametrically opposes this contention, arguing that it is ‘preaching pure and unadulterated socialism’. 6 For example, see Jackson (2004) and Haywood (2005).

Tuberculosis and Malaria is one such example of genuine corporate philanthropy (The

Global Fund, 2011).

There are many cases of MNCs committing to CSR programs that have been commended in

commerce and beyond.7 On the other hand, there are scores of others, particularly in

sectors that are ultimately unsustainable, such as oil, gas, and mining, that have embarked

on a CSR mission, only to find themselves accused of having insincere motives.8 While

some scepticism may exist, MNCs that adopt energy poverty alleviation as part of a genuine

commitment to CSR programs have the potential to deliver considerable benefits to the

energy poor. Zadek (2001, p. 221) explains how such MNCs can become leaders. Leading

civil corporations will be those that go beyond getting their own house in order, and actively

engage in promoting governance frameworks that enable, and if necessary enforce, the

wider business community to address, effectively and without contradiction, the aspirations

underpinning sustainable development.

Building on the premise of genuine CSR, the emergence of the not just for profit (NJFP)

business model challenges the conventional capitalist ideology. According to Kelly (2010), a

small, rapidly expanding group of business leaders who believe returning profits to

shareholders and ensuring their products benefit society are not mutually exclusive goals,

are advocating socially beneficial economic activity. This pioneering group recognises that

the social benefits that stem from their commercial activities should not be a reactive

response; rather they must be intrinsic to the core values of the enterprise. The NJFP

business model is therefore a strategic, long term approach. By adopting a NJFP approach,

MNCs can contribute to energy poverty alleviation efforts, gaining reputational benefits in the

process. This is not to say that NJFP is not a strategic approach to conducting international

business. It is merely a matter of a proactive, advanced approach to CSR. Indeed, the

plausible result of implementing such an approach is likely to be increased shareholder

value in the long term (Vachani et al. 2009, p. 449).9 Dunning (2005) refers to this as

7 See Arena (2004) for a number of examples. 8 This is commonly referred to as ‘green wash’. See Pearse (2012). 9 Perhaps the most acclaimed example of this is the US carpet company, Interface. Since it embarked on its drive to reform from what CEO, Ray Anderson, called the ‘take, make waste’ paradigm, to becoming a sustainable enterprise, the company has saved nearly US$500 million dollars by reducing waste, reducing landfill by 80 per cent and reducing its overall energy footprint by 60 per cent. Along the way Interface has built a very strong reputation so much so that even Walmart seeks to emulate it. See Anderson. (2010).

‘responsible global capitalism'. This differs from the reactive CSR approach, whereby firms

respond to challenges in the community in which they operate, ultimately motivated by

averting productivity losses. Vachani et al. (2009, p. 449) describe this CSR approach as

‘essential social development strategies’.

The bottom of the pyramid (BOP) proponents, including Hammond et al. (2007), Aggarwal

(2006), Prahalad (2005), and London and Hart (2004), would likely argue that delivering

energy services to the energy poor presents an untapped potential for growth, that can

deliver first-mover benefits by creating the potential for the energy poor to become

consumers. Indeed, Hammond et al. (2007, p. 77) assert that out of the developing regions,

Asia has the greatest BOP energy market potential, with 1.5 billion people spending

approximately $177 billion annually.10 Nonetheless, the BOP idea is incongruent with the

NJFP approach to economic activity. According to Dunning (2005), responsible global

capitalism is a question of upgrading the ‘moral ecology’ of the global capitalist system. This

notion is supported by Vachani and Smith (2006), who propose that MNCs operating in

industries that generate products and services that have the capacity to enhance lives, such

as the energy sector, should adopt leadership roles.

The investment required to achieve universal access to modern energy services is estimated

to be US$36 billion each year until 2030. This is a substantial amount in a foreign aid and

development context, but for commerce it is less cumbersome. To illustrate, the ten top

earners of the 2,000 biggest publically listed companies in the world reported annual profits

ranging from US$18.8 billion (ICBC, China) to US$36.7 billion (Nestlé, Switzerland) (Forbes,

2011). The annual profits from these top earners totalled US$234 billion. If these companies

were to form an energy poverty alleviation consortium and pledge to contribute a small

proportion of their profits to the effort, the impact would be undoubtedly substantial, while a

consortium format would enable participant countries to share both the successes and the

risks. A similar approach could be undertaken by the 5,000-plus private and public sector

participants of the UN Global Compact. Indeed, contributing to energy poverty alleviation is

aligned with the Global Compact's eighth principle to: ‘undertake initiatives to promote

10 According to Karnani (2006, p. 5) the BOP approach is flawed, because the poor should be viewed in terms of their potential to produce rather than their potential to consume. Moreover, he acknowledges that the costs associated with delivering services to the BOP market are higher, given their geographic dispersal.

greater environmental responsibility’ (UN Global Compact, 2011).11 These are just two

possibilities, other scholars have considered similar options. A decade ago, Lodge (2002)

proposed the development of a new multilateral entity, which he calls the World

Development Corporation (WDC), aimed at alleviating absolute poverty. The WDC would be

chartered by the UN and function as a joint venture comprising selected MNCs from

industrialised countries, developed country governments and development banks. The main

weakness of Lodge's proposal to form a mega-organisation such as the WDC is that its

ambit is extremely broad. Specialised groups would need to be formed within the WDC

framework to deal with specific issue areas, such as energy poverty, and this has the

potential to breed competition for resources among development issues and their

champions, WDC members and their stakeholders. The organisational model of a WDC-type

body would be extremely complex, and effective governance would be difficult. More

recently, Bazilian et al. (2010) suggested the establishment of a global energy poverty fund,

similar to that of The Global Fund to Fight AIDS, Tuberculosis and Malaria. Such an initiative

would certainly be more targeted than a WDC-type organisation, and a more streamlined

approach would likely be more appealing to prospective investors and contributors. Energy

infrastructure development and diffusion is intricate enough in its own right, therefore a

multilateral structure with which to encourage it needs to be complementary and not more

arduous.

After the less than straightforward experiences of energy infrastructure investors in the Asian

region, it is positive to note that the scope for new investment is not as implausible as some

may believe it to be. In an annual global survey of Chief Executive Officers, Evgeny Dod of

Russia's RusHydro recently stated:

It is clear that the financial crisis has limited rather than eliminated opportunities for renewables, say, in Southern Europe. Territories that are in a stable situation or, in our opinion, have growing economies are of key interest for us. These countries include BRIC and developing economies. Here I mean India, Southeast Asia, Africa and South America.

PricewaterhouseCoopers (2011), p. 24

Moreover, PricewaterhouseCoopers (2010) recently acknowledged that infrastructure is a

high priority globally, and investment returns can be substantial. They noted a renewed

11 As a result of their limited access to energy sources, the energy poor are both perpetrators and victims of environmental degradation (Saghir, 2005).

interest in the sector that brings with it the potential to promote infrastructure finance,

development and innovation in practice, such as the implementation of SmartGrids, and the

adoption of renewable energy technologies.12 Despite the historical challenges that have

transpired in the region, PPPs are increasingly likely in all project stages. Consequently an

intense focus on management, accountability and transparency is needed, to mitigate

problems that may arise from the complexities involved in the course of the partnerships.

This optimistic outlook is important to subscribe to when one considers the potential for

commerce to evolve and respond to its stakeholder demands, but it is hardly infallible. As

Grosse (2006) points out, MNCs cannot and will not provide an across-the-board solution,

but they can certainly contribute to poverty alleviation efforts, making it worthwhile to

leverage their involvement.

In the following sections we focus on the role of multilateral institutions and NGOs. We

consider how these actors can engage harmoniously with MNCs, as well as developing and

developed country governments and their agencies. Though their ambits may be diverse, we

surmise that it is possible for these actors to collaborate to alleviate energy poverty in Asia.13

5. The coordinating role of multilateral institutions Multilateral institutions play a vital role in international cooperation. As Kedia et al. (2006, p.

64) argue, ‘[g]overnments alone cannot reduce poverty charity can only temporarily improve

some of the symptoms of poverty isolation is not the answer to reducing poverty'.

Multilateralism is the collaborative effort of multiple countries in order to achieve optimal

outcomes on issue areas that are important to the international community. The world's

pinnacle multilateral organisation is the UN; with a membership of 193 states, its scope

covers the broad public policy problems that impact the future wellbeing of humanity.

Multilateral institutions have a truly international voice. They identify and promote issues that

impact the international community. In doing this, they can work with their members to

mobilise the resources needed to improve or augment circumstances that, in many cases,

would be an impossible feat if attempted by a unilateral or a bilateral approach. Through

their surveillance and reporting functions, multilateral institutions bring to the fore the

12 SmartGrids combine computer intelligence with otherwise inefficient, unintelligent electrical networks, resulting in the improved efficiency of electricity grids (Battaglini et al., 2008). 13 The establishment of the Extractive Industries Transparency Initiative (EITI), and its impact on the oil, gas and mining industries and their respective host communities, may serve as a useful model for the future of the energy infrastructure sector.

cleavages that exist between countries, in the developed and developing worlds, and within

and across regions. For the reasons outlined here, multilateral actors will be integral to the

alleviation of energy poverty in Asia, and indeed, beyond the continent.

The role of multilateral institutions in alleviating energy poverty is three-fold. First, they act as

coordinators and promoters of stakeholder cooperation. The stakeholders include

developing and developed country governments and agencies, developing and developed

country MNCs, and energy poor communities. Second, they work with developing countries

individually, in order to tailor programs that best suit local needs. The means with which to

deal with energy poverty will differ from country-to-country. To illustrate this point, the

solutions that may be practicable for the Indonesian archipelago may be quite different to

those proposed for land-locked Laos or mountainous Nepal. Similarly, the gender

inequalities associated with energy poverty will vary from community-to-community and thus

need to be addressed at the local level. Part of this country level support will involve the

encouragement of pro-poor policy development. As Tully (2006, p. 518) notes, governments

have made little or no effort to improve electricity access for the rural poor. By championing

pro-poor policies, multilateral institutions can raise the profile of the plight of the energy poor,

and contribute to the development of policy that addresses these often overlooked

communities. Third, they perform surveillance, data analysis, and reporting activities. This

enables progress and regress to be monitored and evaluated, allowing modelling and

benchmarking to occur. Regular monitoring and evaluation efforts, and the dissemination of

reports is an important part of raising the profile of energy poverty among the international

community. It also has the effect of increasing government accountability.

There are currently a number of multilateral organisations, international and regional, that

are concerned with various aspects of energy poverty. Given their existing expertise, the

formation of a multilateral institutional alliance on energy poverty is a logical step forward.

This group, referred to here as the Multilateral Alliance to Alleviate Energy Poverty in Asia

(MAAEPA), would build on the recent alliance formed by the peak international energy and

health organisations, the IEA and the WHO (see WHO, 2010; IEA, 2011a). As Fig. 2

illustrates, membership would also include the participation from the region's multilateral

development bank, the Asian Development Bank (ADB), and the region's foremost

development agency, UNESCAP. Enhanced gender equality is a key development goal of

the WHO, ADB and UNESCAP and thus a critical aspect of their membership would be to

comprehensively evaluate and address the gendered aspects of energy poverty, while child

protection concerns brought about by energy poverty fit within the ADB's sectoral focus of

social protection. Though these four organisations are perhaps the most attuned to energy

poverty and its impacts in the region, this would perhaps be a development-heavy

membership. Energy poverty is primarily discussed in development discourses, but the

development paradigm is limited in providing solutions to the problem, because the financing

solutions lie primarily in the domain of international business and commerce (Ketkar and

Ratha, 2009). Consequently, to avoid a potential deficiency we are proposing the inclusion of

the World Bank's Multilateral Investment Guarantee Agency (MIGA) and the World Trade

Organization (WTO) to represent the interests of the international business community.

INSERT FIG. 2

The MAAEPA union would be a formalised one, and it would have the clear mission of

working with countries, commerce and communities to alleviate energy poverty in Asia. It

would establish its terms of reference, as well as a set of clear objectives in order to achieve

its mission, and these would be monitored on a regular basis, with a progress report issued

to the public biennially.14 Moreover, the responsibilities of each member would be clearly

articulated, drawing on their respective expertise (see Table 3).

INSERT TABLE 3

A concerted effort to alleviate energy poverty by multilateral institutions, such as the

MAAEPA, would help to extend cooperation beyond the bilateral investment treaties (BITs)

that are commonplace in energy partnerships. Srivastava and Mirsa (2007) argue that BITs

have limited South Asia's potential to achieve efficiencies that are possible through regional

cooperation. The suggested MAAEPA membership includes important regional actors that

can advocate increased cooperation and integration for the region's energy sectors. The

envisaged outcomes here are that greater efficiencies will be gained through effective

regional coordination, and enhanced capacity building will be achieved through regional

knowledge and information sharing. The result of this increased regional collaboration is

14 Given the likely complexities involved in producing a report of this nature, we have suggested a biennial reporting frequency rather than an annual one.

likely to lead to improved institutional frameworks to guide the sector. However, multilateral

institutions can only go as far as to establish an international dialogue, engage the

respective stakeholders, and propose a plausible framework for cooperation between them.

Both MNCs and the sovereign governments of countries are powerful agents within their

respective domains, and can nominate the extent to which they participate.

In the final section we explore the perhaps unorthodox contribution that NGOs can make to

the energy poverty alleviation effort, that is, acting as an intermediary between MNCs, host

governments and communities.

6. NGOs: critical actors in alleviating energy poverty NGOs are an active and growing force in the modern world. To some they may appear to be

an incongruous group of radical actors, between them covering an array of social, political

and economic concerns, sometimes overlapping, and at other times opposing each other.

They have been particularly vocal on the topic of globalisation and the uneven development

that has ensued, as well as the adverse impacts on communities and cultures. In the course

of their crusades, NGOs challenge the actions and motives of governments, multilateral

institutions, and MNCs. Accordingly, the future interactions between these various actors,

and the potential for their collaboration, has been a topic of contemplation for scholars

throughout the decade.15 Some of the recent literature in this field is optimistic, proposing

that MNCs and NGOs have the potential to cooperate in order to create more optimal

business models for developing markets (Dahan et al., 2010; Vachani et al., 2009; Oetzel

and Doh, 2009; Kramer and Kania, 2006). As Dahan et al. argue (2010, p. 328):

[j]ust as new technologies can enable businesses to reach new customers, provide better products and services to existing customers – and at lower cost – so too can cross-sector partnerships facilitate the creation of new business models.

In this final section, we briefly explore how these proposed models for cooperation may

enhance the collaborative energy poverty alleviation framework to put forward by this paper.

Western MNCs face a plethora of challenges and risks entering developing markets. These

differences can broadly be defined as variations of institutional standards. As Vachani et al.

(2009, p. 452) explain, the lower the income level of the host country, the less resemblance

15 For example, see Klein (2001), Winston (2002) and Levy and Prakash (2003).

it bears with the institutional environment of the MNC's home country.16 Referred to as the

‘foreign knowledge gap' by Lee and Beamish (1995, p. 641), it is in instances wherein the

institutional difference is vast that MNCs may benefit from collaborating with NGOs that are

familiar with the local business culture and investment terrain. Drawing on Oxley's (1997)

observation that the costs associated with international business transactions are particularly

high in developing economies, Vachani et al. (2009) employ a transaction cost economics

approach in their analysis of MNC–NGO collaboration. They find that in investment

transactions wherein the level of institutional distance is great, high negative externalities are

likely to flow from MNC activity. Moreover, low-to-high levels of civil society development

translates to moderate-to-high transaction costs associated with NGO activism. Put simply,

unless they are operating in unison, NGOs can increase the transaction costs for MNCs

operating in developing countries. As a result, it makes good business sense for MNCs to

team up with NGOs.

INSERT TABLE 3

But how can MNCs and NGOs, being such disparate bedfellows, create a successful union

in an effort to alleviate energy poverty? The middle ground between the two actors shows

promise: the potential for enhanced social welfare, gender equality and health outcomes is

high in the instance of energy infrastructure and the diffusion of clean cooking technologies

intended to alleviate energy poverty. Moreover, their capabilities, diverse as they may seem,

can actually be complementary. The barriers that befuddle investors may well be tacit

knowledge for local NGOs, and from an MNC–NGO union strategies can be devised to

overcome MNC-host country challenges. The optimal outcome here is for MNCs to better

understand the cultural and institutional business norms of their host country, gaining access

to untapped markets and local knowledge. This is likely to have the effect of reinforcing MNC

legitimacy, shielding them from political risk. NGOs, in turn, contribute to the enhanced

development of energy poor communities. Therefore, in the case of energy poverty

alleviation, MNCs and NGOs can work together to ‘develop products or services that neither

could produce alone, creating and delivering value in novel ways while minimizing costs and

risks’ (Dahan et al., 2010, p. 326). These are, of course, merely abstract ideas formulated to

suggest optimal outcomes for both actors. Given that MNC–NGO relations have been largely

16 Of course, for firms that hail from developing countries this gap is less pronounced, although it may still be present if the income level gap is vast.

characterised by hostility and mistrust, particularly in the context of developing countries,

there is always an inherent level of instability at play (Oetzel and Doh, 2009, p. 113). This is

likely to eventuate in misinterpretation and has the potential to transpire into something

worse. Indeed, Yaziji (2004) warns that MNC–NGO partnerships may inspire NGOs to make

unrealistic demands of MNCs to further improve their commitment to development.

Therefore, it must be stressed here that MNC–NGO collaboration is not a panacea. If such

partnerships are instituted, they are highly unlikely to be effective on their own. Rather,

MNC-NGO partnerships are supplementary to the other collaborative mechanisms to

alleviate energy poverty suggested by this paper.

7. Conclusions A flexible, collaborative multilateral approach can achieve energy poverty alleviation in Asia,

but the success of such an approach is dependent on the sustained commitment of key

actors, namely, MNCs, multilateral institutions, the governments and agents of developing

and developed country governments, and NGOs. To that end, we proposed the formation of

the Multilateral Alliance to Alleviate Energy Poverty in Asia (MAAEPA), an alliance

comprising key international and regional multilateral institutions. MAAEPA members would

pool their diverse knowledge and resources to provide targeted support to energy poverty

alleviation, by performing coordination, monitoring and evaluation and reporting functions.

However, perhaps the most critical component to alleviating energy poverty in Asia is

tackling the lack of adept public sector actors in Asia, and the detrimental impact of this on

the institutions underpinned by them. We anticipate that this could be addressed in two

ways: through bilateral or multilateral partnerships between developing countries and

developed countries; and through MNC–NGO partnerships. Developing countries can

collaborate with developed countries to build new capacity and grow existing capacity in the

public sector through educational programs, thereby contributing to improved institutional

performance. Meanwhile, NGOs can assist MNCs to better understand and navigate host

country institutions. Furthermore, we suggest that firms, and particularly MNCs, move away

from the popular mantra that declares their sole responsibility within the international

community is to return profits to shareholders. This is an outmoded outlook that does not

enable firms to engage in and contribute to the local communities in which they operate and

society more broadly, and this can ultimately have an adverse impact on firm reputation.

Contributing to the alleviation of energy poverty through the institution of advanced,

proactive CSR programs, serves three interrelated benefits for firms. They assist the

development of developing countries; as a consequence of this, they gain reputational

benefits; and, as a result of these combined factors, company and shareholder value

increases.

The solution put forward by this paper is multifaceted insofar as it relies on a collaborative

effort from a diverse range of stakeholders. Moreover, Asia's political, cultural, economic and

geographical melting pot lends itself to marked difference across and within the countries in

the region. As a consequence, future research and investigation into the viability of the

MAAEPA needs to focus on better understanding these facets in the context of each country

in the region, including the gendered aspects of energy poverty, and the opportunities and

limits facing a coordinated energy poverty alleviation effort. By having more robust country

profiles at hand, we can glean a better understanding of the gaps in institutional capacity,

community-level needs and the capital and resource requirements. Although the focus of this

paper was limited to Asia, we anticipate that, due to its geographical proximity to Asia, there

is scope to consider broadening the focus of the MAAEPA to encompass the Pacific region.

A limit to our analysis in this paper is the identification of potential NGO and civil society

organisations with the expertise to contribute effectively to the energy poverty alleviation

approach we have proposed. We anticipate these would come to the fore in country-level

and community-level analyses, and local women's groups and child protection organisations

will play an instrumental role in helping to identify and address the gender inequalities and

burdens on children brought about by energy poverty. Future research into existing

community-driven responses to energy poverty would also be beneficial, as these are not at

all mutually exclusive to the MAAEPA approach that we propose. We envisage that these,

too, will be realised as a result of local analyses into energy poverty.

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