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Cash on Delivery Aid for Energy

Author

Listed:
  • William Savedoff

Abstract

Energy is critical to human welfare, yet energy consumption in developing countries is extremely low relative to modern living standards. Conventional aid programs have invested in energy production with some success but also with many notable failures. This paper discusses how a distinctive approach to development aid—disbursing funds against improved outcomes—could make aid more effective in the energy sector. In particular, it explores the use of Cash on Delivery Aid (COD Aid) to resolve perennial difficulties encountered by conventional aid programs in energy sector development. After reviewing energy sector experiences with results payments and presenting the COD Aid model, the paper illustrates the new approach with three examples. The first example involves paying for increases in per capita electric consumption along with rewards for reducing average greenhouse gas emissions per kilowatt-hour. The second example suggests paying for each additional household that is consuming electricity at a basic level of 300 kWh per person per year. The third example promotes financial sustainability by paying a matching grant for appropriately billed and collected energy bills. The paper concludes with a discussion of common objections to the approach.

Suggested Citation

  • William Savedoff, 2016. "Cash on Delivery Aid for Energy," Policy Papers 92, Center for Global Development.
    • Handle: RePEc:cgd:ppaper:92
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    References listed on IDEAS

    as
    1. Charles Kenny & William Savedoff, 2013. "Can Results-Based Payments Reduce Corruption?," Working Papers 345, Center for Global Development.
    2. Fisher, Anthony C. & Rothkopf, Michael H., 1989. "Market failure and energy policy A rationale for selective conservation," Energy Policy, Elsevier, vol. 17(4), pages 397-406, August.
    3. Andrews, Matt & Pritchett, Lant & Woolcock, Michael, 2013. "Escaping Capability Traps Through Problem Driven Iterative Adaptation (PDIA)," World Development, Elsevier, vol. 51(C), pages 234-244.
    4. Yogita Mumssen & Lars Johannes & Geeta Kumar, 2010. "Output-Based Aid : Lessons Learned and Best Practices," World Bank Publications - Books, The World Bank Group, number 2423.
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    Cited by:

    1. Ijeoma Onyeji-Nwogu & Morgan Bazilian & Todd Moss, 2017. "The Digital Transformation and Disruptive Technologies: Challenges and Solutions for the Electricity Sector in African Markets," Policy Papers 105, Center for Global Development.

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