Lao PDR’s resource-based economy is driven by forestry, agriculture, hydropower and minerals. Together, these sectors account for more than half of Lao PDR’s total wealth. Lao PDR will need to diversify its economy and increase environmental sustainability through robust management of its natural resources, including land resources.
The country’s low per capita material and energy consumption, combined with its relatively low population density, leaves Lao PDR considerable room to grow its extractive and production activities without reaching the intensities of deleterious environmental impacts that are seen elsewhere.
The expansion of hydroelectricity routinely excludes large areas of land and previously productive river systems from their former uses. Both mining and hydroelectricity development have been crucial in greatly increasing the Lao PDR's export income and integration into the global economy in recent years, and so facilitating further human development. It is important, however, that the relative benefits of continuing along this path of development be weighed against the alternative of using the country’s mineral and energy supplies as inputs to higher value added products.
The current electricity consumption in Lao PDR is fairly low and hydropower is the most important power producing resource. Lao PDR exports electricity to Thailand and Vietnam while at times also importing from China and Thailand. Barriers to rural electrification include difficulties to access communities living in mountainous terrain as well as road deterioration in the wet season.
Despite these barriers, Lao PDR aims to implement one type of technical intervention – the establishment of mini electricity grids. Rural communities, tourism activities, agricultural facilities, health centers, schools and literacy centers are the focus of these mini grids, due to their demand for electricity for lighting, cooling and appliances. The mini grids will predominantly use renewable energy sources (powered by hydro or solar) and will provide electricity for lighting, service and production activities to support livelihoods, radio for communications and other household uses.
A comparison of greenhouse gas inventories for 1990 and 2000 shows that emissions had doubled in ten years. Lao PDR recorded a net sink of CO2 in 1990 and a net emission by year 2000. Of the total CO2 emissions, nearly all were emitted by land-use change and forestry. The agriculture sector produced the greatest share of methane (CH4) and nitrous oxide (N2O). Climate change mitigation will depend on reversing the loss of forests and other land use changes.
Lao PDR has made progress towards reducing greenhouse gas emissions, spearheaded by the Institute of Renewable Energy Promotions in the Ministry of Energy and Mines.
Sustainable energy is one of 17 Global Goals that make up the 2030 Agenda for Sustainable Development. An integrated approach is crucial for progress across the multiple goals. Learn more about Goal 7 and its targets.