Transcriber: Dan Forest-Barbier Reviewer: Capa Girl
So, without romanticizing this too much,
imagine that you light your home with
kerosene and candles every night
and that you do all of your cooking with charcoal.
This is how the world's 2 billion poorest people
cook and light their homes every day.
This isn't just inconvenient,
this is inefficient, it's expensive,
it's harmful to human health, to the environment,
and it's unproductive. And that's energy poverty.
So let me give you a couple of examples:
I worked in Haiti where about
80% of the population lives in energy poverty.
The average household spends 10% of its income
on kerosene for lighting – that's an order
of magnitude greater than what the average
US household spends on electricity to light their homes.
The 2008 hurricane season in Haiti caused about
1 billion dollars in damage, that was a sixth of their GDP.
The damage was so severe because the primary
energy fuel in Haiti is charcoal, which is made from trees,
which is made from trees,
and it's left the country almost completely deforested.
Without trees, the country can't absorb
heavy rains and massive flooding, as a result.
So in the industrialized world,
we build walls to protect us from the externalities of our energy use,
we can afford to clean up acute environmental disasters
and we can also afford to adapt
to chronic conditions like climate change.
That's not the case for Haiti, they can't afford this.
The only way that they're going to let themselves out of energy poverty
is by adopting fuels that are more efficient,
that are less expensive,
that are better for human health,
that are better for the environment, and that are more productive.
So it turns out that those fuels and technologies exist,
and this is an example of that:
this is a solar LED light bulb that we sell
for a retail price of about 10 dollars in rural Haiti.
That's a payback period of less than 3 months
for the average Haitian household.
The prescriptions to solve energy poverty
seems pretty straightforward -- you develop these technologies,
that have a great return on investment,
and people should be snatching them up.
But that's not the case.
The first time I ever went down to Haiti
was in August 2008, sort of on a whim,
and I was fielding surveys in the rural
south of the country to assess the extent of energy poverty.
And at night I would go around sometimes
and I would speak with the street vendors
and see if they were interested in buying these solar LED lamps.
And so one woman who I encountered turned down
my offer, and she said, “Mon chéri, c'est trop cher.”
Which basically means, “My dear, it's too expensive.”
But I tried to explain to her, you know:
“Look, this is going to save you a lot
of money, and it's going to give you
even better light than what you're using now with the kerosene.”
So I didn't make the sale,
but I did learn a really important lesson
which is that technology, products
were not going to end energy poverty.
Instead access was going to,
and specifically there are 2 types of access
that are going to end energy poverty:
there's physical access, and there is financial access.
So, physical access -- what does that mean?
It's very expensive for low-income households
in developing countries to reach major
centers of commerce, and it's basically impossible
for them to order something off amazon.com
“the last mile” is a phrase that is normally associated
with the telecommunications industry,
it means that last bit of wire that's necessary
to connect the customer to the provider.
What we need for ending energy poverty
are “last mile retailers” that bring these
clean energy products to the people.
The kerosene and charcoal value chains already figured this out:
those fuels are ubiquitous across the entire country.
You can go to the most remote village in Haiti
and you will find somebody selling kerosene and charcoal.
So the other type of access: financial.
We all know that clean energy products,
technologies, tend to be characterized
by a higher upfront costs, but very low operating costs.
And so in the industrialized world,
we have very generous subsidies that are
specifically designed to bring down those upfront costs.
Those subsidies don't exist in Haiti.
What they do have is micro-finance,
but you're going to severely diminish
the value proposition of your clean energy product
if you expect somebody in Haiti
to go out, get a micro-loan, go back to the retailer,
and then buy the clean energy product.
So the prescription to end energy poverty
is much more complicated than simply products.
We need to integrate financial access
directly into new, innovative, distribution models.
What does that mean?
That means bundling consumer credit with the retailer.
This is really easy for Bloomingdale’s to do,
but it's not so easy for a rural sales-agent in Haiti to do.
We need to redirect cash flows that
are going now from the diaspora in the US
to Western Union wire transfers in cash
directly into clean energy products
that can be delivered to, or picked up, by their friends or family in Haiti.
So the next time you hear about a technology or product that's going
to change the world, be a little bit skeptical.
The inventor Dean Kamen, the guy who invented the Segway,
a genius by any standards, once said that his job is easy,
inventing things is easy,
the hard part is technology dissemination
-- it's getting those technologies and products to the people who need it most.
Thank you.
(Applause)