If the cooperative model is far from being a new one, it has been lately put in the spotlight as a key to achieve the Sustainable Development Goals (SDGs). This set of 17 goals was designed by the United Nations to reduce poverty and inequality worldwide while also decreasing our environmental footprint by 2030. How does community energy fit into this scheme?
On October 11, one of the advisors of candidate Hillary Clinton to the US 2016 election, the renowned economist Prof. Joseph Stiglitz (Columbia University) gave a keynote lecture at the International Summit of Cooperatives in Quebec (ISCOOP2016). The conference focused on the role played by cooperatives to reach the SDGs. Stiglitz framed the coop movement as a game changer to help redistribute wealth within the society and cooperation as an alternative to Milton Friedman’s trickle-down theory.
And indeed, as stated by Melina Morisson (Business council of co-operatives and mutuals Australia), “cooperatives have the power to act on the real economy” and “not only on our community but also on the global economy”. The declaration of the ISCOOP2016 further indicates that “In regard to the UN Sustainable Development Goals (SDGs) to 2030, cooperatives and mutuals recognize that they are a significant lever for introducing sustainable development strategies and for resolving the key global issues”.
For an overview of how cooperatives align to the SDGs and generally to challenges of the 21st century (food safety, poverty alleviation, resilience and reduced inequality -among others), you can read this article of Mike Hegarty on the 2 degrees Network website. He explains that the even though they exist in various forms all over the world, the core of the cooperatives’ business model (providing services and profits to the owners/users and not to external investors) brings specific comparative advantages: they contribute to gender equality, create resilient jobs, reduce poverty and increase collective access to capital. These fall directly in the scope of SDG1 (no poverty), SDG5 (gender equality), SDG8 (Decent work and economic growth) and SDG10 (reduced inequalities).
In this arena, the energy co-ops play a specific role.
- They help reaching these structural goals and they also provide a civil control on the energy infrastructure. This, I already mentioned in the first episode is important in terms of strategy: power plants should be kept in the hands of the public to avoid misuse by private actors.
- When citizens are involved in decision-making regarding their energy supply, they tend to adopt a technology that fulfils their needs and is adapted to their environment (the appropriate technology).
- The flexibility of the cooperative model also leaves space for accommodating cultural differences and traditional community structures.
- Community members learn along the way, create bonds in the community and with local authorities and tend to reinvest the profits for the public good.
Finally, in countries where money is scarce, development could take the shape of a carbon bomb if energy is supplied through fossil fuels. Energy cooperatives provide an excellent mean to leap-frog carbon-rich fuels and get access to funding, even when return rates are low. According to the policy brief jointly prepared by the International Labor Organization (ILO) and the International Cooperatives Alliance (ICA) “Cooperatives and the Sustainable Development Goals” energy co-ops presently fill an investment hole: they are active “mainly in rural areas where the return on expensive infrastructure investment was not high enough to attract investor-owned utilities”. They also transfer knowledge and capacity between countries to help set up new coops: “Bangladesh was later assisted by the US electricity cooperative movement”.
One main barrier for cooperatives is finding funding for initial investments, but cooperative banks and financial institutes, who have on-the-ground expertise, could provide a critical support. The above-mentioned policy brief also explores the possibility to set up public-private partnerships (PPP). In order to remain within a community-owned scheme, there is a need to investigate various forms of PPP, where the civil society would play a bigger role (this will be the topic of a future episode!).
Hope you enjoyed this article. Send me any comments or questions and stay tuned!