In this fascinating interview, Arun Singh, a student on MIT’s Technology and Policy Program, explores the challenges faced by developing countries attempting to provide electricity to their citizens, whilst keeping greenhouse gas emissions down.
[00:00:00:10] ARUN SINGH: In my undergrad I studied chemical engineering there, after which I joined an oil refinery. Worked there for a couple of years. So I was working as an engineer, and gradually I moved away from it towards doing policy. I think one important reason for that was, when I was working with the oil refinery, I felt that if I stick with this, there would be a very narrow space of work that I would be confined to. I might do great in this narrow space, but the domain would be limited. Whereas if I decide to do something related to policy, whereas if I decide to look at more broader concerns that shape an energy and environment policy, then that would expand the area in which I can work. And I think that was why I decided to move away from what could have been a very lucrative career.
[00:01:05:24] My interest has moved more towards looking at the financial component of these changes, because a lot has happened in technology, and it's still evolving. But because of the uncertainties associated with where is this going, what's the future of these technologies that are coming up, the financing component remains challenging and remains very exciting. So for example, in many of the developing countries, including India and places in Africa, solar power is expected to be a very good solution for both addressing climate change as well as expanding electricity access. But because of the uncertainty in returns, because of the low willingness to pay off many of the consumers in rural areas, financing the expansion of solar power has still been a difficult issue.
[00:02:05:13] It was very important to see why there are very valid reasons for things to work out slowly when they are with the government, because I would interact with government officials on a daily basis, with pollution regulators in India on a daily basis. And I would actually see that there are valid reasons and valid concerns because of which things move slowly in the bureaucracy and in the government. I happened to interview different stakeholders involved with solar energy in India, including companies including people from the government and so on. And one common theme that I figured was that the government does have a lot of very favorable policies, and there is a perception among developers that these policies are helpful. However, at the same time there was also the concern that the implementation of these policies may not be going on very smoothly, so that's something where even if the government has good intentions and is doing a lot, there is still room for improvement.
[00:03:10:24] One very big concern with developing countries which also ties in with the work that I'm doing here-- so it's specifically talking about India, for example-- is that there is still a huge shortage of electricity. Electricity access in particular. Around 200 million people still don't have access to electricity. While tackling that challenge, the developing countries are also expected to make sure that they do not add a lot of burden, they do not end up emitting a lot of greenhouse gases and add more to climate change. So managing that balance becomes difficult for developing countries, I would say, because coal continues to be a cheap source of power, particularly for India. But that's not a source of power that India could aggressively deploy in the coming future.
[00:04:05:20] There are certain challenges particular to developing countries in financing cost as well. So for example, the cost of debt in developing countries is higher than the cost of debt elsewhere. Low interest rates in India are typically 8% or 9% as compared to 3% or 4% in the US, or in the west. So that I think puts developing countries definitely in a tough spot, which is also why they have been demanding climate finance.
[00:04:36:22] I would want to have a lot more solar power in the world, many electric vehicles on roads. And I think if these two things come together-- although there are many technological and financial and political challenges in these things coming together. But if this happens, I think this would be a huge change.