March 1, 2005

This report underlines the view that without the availability, accessibility and affordability of clean energy and water provided by market-based approaches, the political stability in many developing countries that is a prerequisite for economic growth and sustainable democratic governance will not be achieved.

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Whether or not poverty and environmental degradation are direct causes of terrorism and conflict is debatable. But few would question the view that the persistence of poverty and extreme deprivation is incompatible with the enduring spread of freedom and democracy in the developing world, goals that are increasingly central to U.S. foreign policy. And the alleviation of poverty depends in large measure on the ability of developing countries to obtain the clean energy and water supplies necessary to enable them to promote economic growth and improved public health.

Against this background, the Atlantic Council of the United States convened a working group in September 2004 to discuss a proposal for launching a new initiative – loosely modeled on the Marshall Plan – for the development of energy and water resources in appropriate developing countries. This report summarizes the conclusions of the working group and reflects the group’s consensus as to the desirable elements of such a plan.

Executive Overview

Today, hunger, poverty, and desperation remain prevalent throughout much of the developing world. If we are to live in a 21st century more prone to peace than violence, the developed countries must move expeditiously to address the developing countries’ energy and water problems. The availability, accessibility and affordability of energy and water are vital to the economic development that is required to alleviate global poverty and to address environmental degradation.

The challenge ahead is to ensure adequate supplies of clean energy and water to the billions of people currently deprived of these necessities. Without a radical change in policies in the developing and developed countries, there will still be about the same number of people without access to electricity (1.5 billion) and the same number of people continuing to rely on non commercial biomass fuels (2.5 billion) in 2025 as today. This will occur even if the developing countries consume almost 60 percent of the growth in global energy supplies and increase their share of global energy supplies from 30 percent today to over 40 percent in 2025.

Similarly, by 2025, over 60 percent of the world’s population will continue to live in countries with significant imbalances between water requirements and supplies, largely in Asia, Africa and Latin America. Today, over one billion people lack access to safe drinking water and 2.4 billion lack access to improved sanitation.

Energy and water issues are inexorably bound together. Energy production is a major user of water as well as essential to the supply of water. Both energy and water problems stem from many of the same issues:

  • Insufficient financial resources
  • Inefficient usage
  • Inadequate institutional arrangements
  • Lack of coordination between energy and water sectors
  • Lack of political commitments
  • Inadequate human resources
  • Insufficient community involvement
  • Inadequate operations and maintenance
  • Insufficient information and communications.

While the UN and individual countries are addressing a number of energy and water issues relating to sustainable development, it would be timely for the United States to undertake a private/governmental initiative to develop a Marshall Plan for Energy and Water for Developing Countries. The plan would be developed as follows:

  1. Public and private institutions should utilize a proven means of bettering the world through economic cooperation and development.
  2. A senior executive corps in the service of creating a better world should provide the human resources for the transfer of techniques, procedures and know how.
  3. An extensive list of institutions should be developed, that could be utilized to provide capital to support energy and water infrastructure development.
  4. Assistance should be provided on a country-by-country basis with specific time frames for assistance in each country.

At a later date, the Atlantic Council would plan to establish a broader working group that would include key experts from the European Union, Japan, developing countries and development banks. This working group would establish a steering committee to provide continuing oversight to the process and to the development of reports, recommendations and plans emanating from the participating countries. The Atlantic Council would assume a major role in coordinating the work of the steering committee. Oversight by such a steering committee is seen as critical to obtaining the commitment and support of major international financial institutions, supporting governments and private corporations.

The participating countries would assume responsibility for the development of work schedules, national costs and personnel associated with the development of their individual country reports. They would also assume responsibility for the implementation of plans within their respective countries.

This program is envisioned as leading to a Plan that would create a framework for building a network of institutions capable of raising the investment capital required to assist in the development of clean and affordable energy and water programs in selected developing countries.