Developing Nations: Our Future Depends on Them

It's tough letting old beliefs go. They are familiar. We are comfortable with them and have built systems and developed habits that depend on them. Like someone who has worn eyeglasses so long that he forgets he has them on, we forget that the world looks the way it does because we have become accustomed to seeing it that way through a particular set of lenses. However, as recently pointed out by consultant Kenichi Ohmae: "We need new lenses. And we need to throw the old ones away."

Art Garfunkel and Paul Simon, two bards of the 1960s, wrote a song The Boxer in which they claimed: "After changes upon changes, we are more or less the same." Plus ca change, plus que c'est la meme chose! In the 1990s, one doesn't hear that refrain as often. In fact, we're seeing more and more evidence that, the more things change, the greater the pressure for further change.

One area where we are witnessing considerable pressure for further change is to close the gap between living conditions and equality of lifestyle in the industrialized world, on the one hand, and in the developing nations, on the other.

We live in a world of rapid communications. A world influenced by the ubiquitous television set. CNN seems to find its way into every village on every continent. People are more aware than ever of the disparate lifestyles in different regions of the globe. It might be well to recall Henry George's mid-nineteenth century warning: "What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power."

Economists argue the need to address the economic disparity by building a sound infrastructure for developing countries. Environmentalists, however, point out the ecological destruction that flows from a strategy encouraging the Third World to industrialize. This tension between the economists and environmentalists is not easy to resolve. As is often the case in politics, the decision is between the disastrous and the unpalatable (John Kenneth Galbraith). The proper course of action is not clearly marked. Like Yogi Berra once said: "When you reach the crossroads, take it!"

According to our guest speaker, Dr. Stan Hatcher, energy--and, more importantly, our energy choices--will play a critical role in attempting to address the global economic imbalances. As CEO and President of Atomic Energy of Canada Limited, Dr. Hatcher has done extensive research on the subject of developing the Third World in an environmentally responsible fashion.

Dr. Hatcher has been with AECL since 1958. In his more than three decades with the Corporation, he has been involved in almost every aspect of its operation: chemical engineering, chemical technology, and marketing, prior to assuming the job of CEO in July of last year. Dr. Hatcher is an executive member of several international organizations involved in the issues of international energy needs.

As an engineer, an economist and an environmentalist, Dr. Hatcher wears the three necessary hats to play a leadership role in developing the Third World. His remarks today are entitled: Developing Nations: Our Future Depends On Them.

Ladies and gentlemen, please welcome Dr. Stan Hatcher.

Stanley Hatcher:

Mr. President, distinguished head table guests, members of the consular corps, members of The Empire Club, ladies and gentlemen. I welcome this opportunity to address such a distinguished audience.

I always relish the chance to discuss such exotic after-lunch topics as exajoules, radioisotopes, and transuranic waste. But today I've decided to go easy on you.

I want to begin with something we're all comfortable with. The electric light bulb. We've all heard the fight bulb jokes. But the joke only works if you're lucky enough to have a fight bulb to change. Billions of people do not.

Electricity has brought prosperity to people who are fortunate enough to live in Canada and the other developed nations. But there are still billions of people living in dark corners of our world. What they need--as a catalyst to a better way of life--is a reliable source of electricity.

Think back on our energy history. The first important discovery was fire. Burning wood for warmth and cooking, for fight and protection. And charcoal for metalwork. By and large, fire was the extent of our energy history until 200 years ago. In the last 200 years we learned how to use fossil fuels, specifically coal, oil and gas. These gave us bigger--and potentially badder--things. The Industrial Revolution on the one hand, pollution on the other.

Then--about 100 years ago--along came the light bulb. The jokes came much later, once the light bulb had lost its mystery and had become mundane. Electricity not only powers the light bulb, it also powers industrial processes and cities, home appliances and hospitals, telephones and computers--in fact, virtually everything we do today. Electricity has truly been the great liberator of men and women. Yet, even now, the path of prosperity is not well illuminated for the people who five in the shadow of under-development.

In many parts of the world today, wood and animal dung are still the principal source of heat and fight. Life for many hasn't got much better than that in the past 200 years.

Today, I want to talk about what we should do to correct that imbalance. I want to discuss the global dilemma Huge energy demands on the one hand, concerns about a healthy environment on the other hand.

Let's look at the size of the global challenge. The developed nations have a collective population of about 1.5 billion people. According to the United Nations, that population is projected to rise to approximately 1.9 billion by the middle of the next century, a 26-per cent increase over 60 years.

The developing nations, by contrast, have a collective population of about 4.2 billion people. By the next century, that population is projected to rise to approximately 9.5 billion, a 126-per cent increase over 60 years. Think about these numbers. By 2050, a population increase of 400 million people among the developed and affluent nations. By the same year, a population increase of 5.3 billion people among the developing and poorer nations.

These population projections are truly staggering. The have-nots will grow 13 times faster than the haves. Now think about that in terms of economic and social sharing among the world's populations. Equity is not a word that readily springs to mind, is it? Of course, the people of the developing nations are not going to sit idly by in poverty and watch one in four of the world's population enjoy the high life.

In this global village of instant visual communication, they know exactly how we live. They want that way of life for themselves. And, with or without us, they will go for it by industrializing their economies as rapidly as they can.

That means finding ample and reliable energy, particularly electricity, and that means a surge in global pollution. Right now, there are four principal sources of energy. The biggest is fossil fuels. About 75 per cent of the world's energy is supplied by burning coal, oil and natural gas. The second is, surprisingly, still wood, 15 per cent of the world's total energy supply. In North America, by contrast, fuel wood makes up less than one per cent of our energy usage.

Next comes hydroelectricity at about five per cent of the world's energy supply. Finally, there is nuclear power. Nuclear power contributes almost five per cent of the world's energy supply.

Here in Canada there are 20 operating nuclear power plants. They produce 16 per cent of our electricity. And in the United States, there are 114 operating reactors, which generate 19 per cent of that nation's electricity. In some European nations, the reliance on nuclear power for electrical energy is even higher--ranging from 45 per cent in Sweden to 75 per cent in France.

So what we have is a situation where the emerging economies rely heavily on fossil fuels, wood and most anything else that will burn. The gap between the developed nations and those that are still struggling to emerge is great. Canada, for example, has more nuclear reactors than Argentina, Mexico, Brazil, the Philippines, Thailand, Indonesia and Taiwan combined. We even have more nuclear power plants than Korea and China.

This presents a stark and telling contrast, considering our respective populations. The gulf between having and not having is wide indeed. The biggest concern in this global mix of energy sources is pollution. After all, pollutants, once up there, recognize no political or economic boundaries. Many scientists believe that unless we do something soon to offset the burning of fossil fuels, the global environmental damage will be irreversible. So we are back to our global dilemma.

The population growth, as we have seen, will be overwhelming among the developing nations. The poorer nations will quite rightly demand the opportunity to energize their economies so that they can enjoy the comforts and good health we have. That means absolute energy demand will rise much faster than the population rate as the developing nations struggle to industrialize.

So what can we do--what should we do--to bring better balance between the energy-rich and energy-deprived parts of our world without doing further unforgiving damage to our planet?

First, there is no doubt that the world will continue to rely on fossil fuels for most of its energy production. The burning of coal, as well as oil and gas, will expand relentlessly in Asia, India, Africa, South America and other heavily populated areas of the world seeking a better way of life. Coal and other fossil fuels make sense to those emerging nations because they are readily accessible, relatively economical to produce using off-the-shelf technology, and they are abundant.

What about other energy sources to reduce reliance on the burning of fossil fuels? Perhaps the developing nations should opt for hydro-electrical power instead. They can and they will. But, as the World Energy Council notes, the amount of hydroelectric capacity that remains to be developed is about the same as we already have. So, as the world population doubles, the proportion of energy supplied by hydroelectricity will certainly not increase.

Renewable sources, such as fuel wood, solar and wind, could gain importance, but their proportional contribution will remain small. Whatever the energy supply mix, two points are clear.

First, we cannot meet the realistic energy needs of the developing nations for a sustainable standard of living without turning to alternatives such as nuclear power.

Second, if we don't choose alternatives to a massive increase in the burning of fossil fuels, future generations will choke to death.

Let's look a little closer at the environmental consequences of different energy sources. Consider two 1,000 megawatt power plants, one fuelled by coal, the other by uranium. And make no mistake about it, the world will need a lot of coal in the future. The coal plant will throw off seven million tonnes of carbon dioxide a year. The nuclear plant will produce zero. The coal plant will produce up to 120,000 tonnes of sulphur oxides a year. The nuclear plant will produce zero. What about radioactive materials? The same story.

Coal plants release unmonitored amounts of uranium, radium, and thorium--all of which are radioactive elements present in coal. Nuclear plants in Canada emit tritium, a radioactive form of hydrogen. These radioactive emissions are a tiny percentage of natural background radioactivity. What about wastes? The story remains consistent. The coal-burning plant typically creates 750,000 tonnes of waste a year. The nuclear power plant, 50 tonnes. The coal plant's waste is mostly ash, and contains arsenic, mercury, cadmium and lead. All that stuff is discharged into the environment. The small volume of nuclear waste is spent fuel that decays over time and loses its radioactivity. And it is stored in concrete canisters or submerged in pools of water.

In making this stark comparison, I am not condemning coal and natural gas, which also contributes substantially to the greenhouse effect. Rather I seek to provide an environmental perspective. Both will continue to fuel energy needs in a significant way.

China is an example. Currently, China is building three nuclear generating plants. Over the next 25 years, it will expand its nuclear power capability five-fold. But, even then, nuclear power will provide only 6.5 per cent of China's total electrical generation. Coal will still be the driving force behind China's electrification program. And it is projected that by 2015 China's coal burning will add two billion tonnes of carbon dioxide to the atmosphere annually. That is 50 per cent of the world's current C02 emission.

The seriousness of this situation from a global perspective cannot be underestimated. There is a massive gap between public expectations and industrial reality on this point. Most people in the developed world believe that the world will reduce polluting emissions in the future. But this belief flies in the face of the projections for industrial growth among the developing nations. On the one hand, the expectation of a less contaminated global environment.

On the other hand, the reality of escalating energy requirements coupled to demands among poorer nations for a better standard of living. Even in the developed nations, the consumption of fossil fuels will continue to increase. Climate change, acid rain, urban air quality, and other environmental problems have all been linked to the consumption of coal, oil and natural gas.

Yet, these fuels are the very basis of our economy in Canada. Frankly, it is virtually impossible to cap C02 emissions. Realistically, when there are 11 billion people walking this earth in the middle of the next century, they will not be persuaded by our talk of environmental integrity. What they will want then is what we have now, a wonderful quality of life. None of this should cause us to be pessimistic. Indeed, the challenge gives rise to all sorts of opportunities.

Even Adam Smith's invisible hand would be fidgeting with delight at the business prospects in all of this. We have got to foster an orderly growth in electrical power, based on a mix of energy sources including nuclear power, so that the emerging nations attain economic self-respect. Can it be done? Of course it can.

Korea is an example. In less than 20 years, Korea has established nine operating nuclear units that supply more than 50 per cent of the country's electricity needs. And during those 20 years, Korea has experienced phenomenal rises in national prosperity and will continue to do so.

There are political benefits to exporting our nuclear generating expertise as a catalyst for economic growth. The rise of an affluent middle class from economic expansion brings with it a commitment to democracy and political stability. And that means a greater chance of sustainable international peace.

Consider the desperate plight of Eastern Europe. Our energy expertise is one form of assistance that can help these nations attain a new economic and political dignity. Romania is an example. We are completing a CANDU project there that will provide 30 per cent of that nation's electricity. The reliability of that capacity will do much to bolster the people's faith in the new and struggling market economy. It will contribute to improvements in the standard of living. It will create confidence in the fledgling democracy.

The benefits of exporting CANDU reactors are far greater than those provided by science and technology alone. We endow these nations with something valuable to their future success--advanced skills for their scientists, for their engineers, for their managers and for their workers.

Now let's look at the advantages for Canada. The recent CANDU sale to Korea serves as an illustration. This one sale will generate $400 million for the Canadian economy. It will provide 7,000 jobs, mostly in the private sector, over the next four years. It will foster manufacturing in Ontario, Quebec and British Columbia. It will encourage design and engineering work among firms in Central Canada. All of that from one sale.

Right now, there are 343 large power reactors in the world. Of them, 26 are CANDUs. That's a small percentage, but the CANDU carries a big reputation. A reputation for performance that many nations are beginning to appreciate. Design, construction, operation, safety systems; we excel in all areas. The CANDU reactor has an enviable reputation. Up to the end of 1991, three of the world's top 10 reactors in terms of lifetime power performance were CANDU reactors. The No. 1 performer in the world is the CANDU reactor in Point Lepreau, New Brunswick.

The excellent performance of Korea's first CANDU was a key factor in that country's decision to order its second CANDU last December. All of this adds up to a nice equation of economic and social gains for Canadians and the developing world.

But we still have to resolve the underlying dichotomy. On the one hand, then, are the billions of people who are economically driven to maximize their resources. On the second hand, are those people who are ideologically driven to environmental minimalism. Two hands that never come together in applause, let alone in a friendly handshake.

So how can we resolve the conflict and find a shared triumph? The answers are relatively easy to state, but not necessarily easy to accept. And we must recognize that the people of the developing nations deserve their time in the sun of social progress and economic prosperity. But they can't afford to do this alone.

They need our scientific, technological and technical expertise to produce the energy they need and to make that energy generation environmentally responsive. They need our financial support in balancing economic development with environmental responsibility. They need our involvement in sorting out the global options for controlling the emissions of greenhouse gases. And they need our training so that their own people can acquire the skills to develop and operate generating facilities safely and cleanly.

But because our future also depends on an environmentally sound mix of energy choices, make no mistake, we need them to. With commitment from all quarters, together we can help to fulfil the miracle of the light bulb. Thank you.

The appreciation of the meeting was expressed by Bart Mindszenthy, Public Relations Counsel, and a Director of The Empire Club of Canada.