(Energy) poverty is very bad for humans and the environment

It’s time to stop pretending that the planet will be saved by maintaining energy poverty in low-income states

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I: On the global distributive politics of climate change

Two recent news items illustrate the challenges facing low-income countries trying to escape poverty and underdevelopment in an age of climate change; and the continuing inability to have a reasonable discussion on the subject at a global level.

In South Sudan, the government directed the closure of all schools due to intolerably high temperatures. Consequently, 2.2m children had to stay home. South Sudan’s school attainment rates are already deplorably bad. Secondary school enrollment rate is barely above 11%. These kinds of disruptions, which undoubtedly will become more common as global temperatures rise, will only worsen education attainment rates and therefore dampen South Sudan’s growth prospects. In general, research suggests that failure to mitigate high temperatures will mean that both farm and non-farm work will struggle to see any productivity gains. There’s very little air conditioning or irrigation infrastructure in South Sudan.

The subtext here is that even before it can consider transitioning to a greener way of life, South Sudan needs rapid economic growth and development in order to be able to address the effects of climate change.

The challenge extends beyond the education sector and South Sudan’s borders. According to the New York Times:

The heat wave is also expected to put pressure on the country’s nascent health care system, which has long grappled with limited financing and worker shortages.

South Sudan is not the only African country where extreme weather events have precipitated school shutdowns. In 2022, Malawi’s government shortened the school day in the southern Shire Valley because of rising temperatures. And in Uganda, severe floods have repeatedly forced the government to close schools over the years.

The other news story was a BBC Hardtalk interview with the President of Guyana, Mohamed Irfaan Ali. At some point in their exchange, the interviewer raised the question of whether Guyana’s coming oil bonanza reflects a lack of concern for fossil fuels’ impact on climate change. To his credit, Ali was prepared with a strong answer, and argued that countries like Guyana already do their part to reduce emissions by preserving forests (not to mention not having been historical polluters). More importantly, Guyana needs all the growth it can get in order to improve livelihoods.

Overall the BBC interview reflects a prevailing unwillingness by many commentators, academics, climate activists, and policymakers to (i) understand that energy poverty is bad, and all countries have a legitimate right to escape energy poverty and general material want; and (ii) that tackling climate change will require a disaggregated approach whereby historical polluters in high-income countries aggressively reduce their emissions and invest in green alternatives, while lower-income countries gradually transition to green technologies (and in some cases subsidized by wealthier countries) without jeopardizing their own growth prospects.

Let’s be clear. Human-caused climate change is real and we should do everything in our power to reduce the amount of greenhouse gases in the atmosphere. In addition, the choice between accelerating economic growth and development in low-income countries and urgently tackling climate change is a false choice. We can do both.

In fact, making growth work for climate mitigation, adaptation, and transition might be the best chance we have got — especially in low-income countries. It is a losing proposition to suggest that, in order to save the planet, low-income countries should embrace energy poverty and forego growth and development. Why should they be the ones to provide this public good? In the same vein, it would be wrong for high-income countries to bully lower-income countries into signing into anti-growth climate pacts and policies, including via the back door of development assistance.

Two important facts ought to guide our thinking about climate change and economic growth and development.

1. The whole point of trying to save the planet is to make it safe for human habitation. Therefore, it would be odd to completely ignore the human welfare implications of green policies — especially in the poorest parts of the world. It also follows that people who take extreme misanthropic positions regarding climate change should be roundly ignored.

2. At the moment, growth and broad-based development are the best safeguards against climate disasters, environmental degradation, and future greenhouse emissions. The effects of climate change are already among us, and hitting low-income countries the hardest. These countries need grow as fast as possible so they can have cash for infrastructure that can withstand flooding and extreme temperatures; agricultural technologies and infrastructure that are resilient to climate change; and yes, investments in green technologies for the future. Keeping low-income countries poor today will not only keep their populations exposed to the vagaries of climate impacts, but also forestall investments in the green technologies of the future.

For these reasons policymakers in low-income countries should carefully scrutinize all policy prescriptions that come with climate riders. In the grand scheme of things, the promises of donor funding that accompany such policies are simply not worth it. If in doubt, look at the total lack of seriousness with which high-income countries treat their promises to provide financial support for climate mitigation and adaptation in low-income countries. Often, the real action happens around initiatives like the European Union’s Carbon Border Adjustment Mechanism (CBAM) that is projected to reduce African economic output by up to $25b. When the rubber meets the road, only suckers will be left embracing (energy) poverty in the name of saving the planet.

It is regrettable that too many politicians, policymakers, civil society actors in African states remain vulnerable to intellectual and policy capture regarding what ought to be done about climate change. The allure of quick (aid) cash and the need to keep getting invited to global talking shops have led several to commit to climate targets or policy schemes that will subject their populations to unconscionable levels of (energy) poverty for years to come. Climate discourse in the region has largely been divorced from energy needs and reduced to talking about carbon sinks and conserving biodiversity (and associated financial schemes). The problem of energy poverty and how it continues to fuel material want in most African states remains ignored. Meanwhile, carbon financing scams are accumulating at a rapid pace.

Per capita consumption data across African states, compared to Todd Moss’s fridge. Source: Eat More Electrons

To be blunt, any climate agenda that doesn’t recognize the very urgent need to end energy poverty across Africa should be rejected outright. Energy-poor countries must not let themselves become preserved sites where firms and households in energy-rich countries earn their carbon credits and the license to pollute. This concern motivates my skepticism of any attempts to pitch low-income countries as places for achieving low-cost “quick wins” in tackling climate change. In a world where (experts from) high-income countries set the agenda, the pursuit of such “quick wins” will undoubtedly come at the expense of improvements in energy access and human welfare in low-income states.

II: Energy poverty is bad for humans, for economic development and job creation, and for the environment

How can economic growth — which often comes with increasing emissions of greenhouse gases — be good for the planet? The answer lies in the fact that (1) economic growth enables households and economies to move up the energy ladder, thereby using ever safer and cleener sources of energy; and (2) economic growth and development opens up new sectors (jobs sans smokestacks) that facilitate further growth under conditions of declining consumption-based emissions (i.e., country-based emissions figures that account for imports from more polluting jurisdictions).

The first answer above assumes that those of us who care about reorienting human economic activity towards greater sustainability also care about the costs imposed on actual humans by energy poverty. In her recently published book, Not the End of the World, Hannah Ritchie presents data describing the idea of the energy ladder and associated household-level health costs at each stage of the ladder. Using wood and charcoal for fuel causes lots of respiratory illnesses that kill lots of people, not to mention causing deforestation in some contexts. Importantly, economic growth and development is a good way of reducing household pollution by moving households from solid fuels to cleaner energy.

Unfortunately, in most African states, the share of people using solid fuels as the main cooking fuels has not declined fast enough (see below). As a result, household pollution “is the third highest risk factor for mortality and morbidity in Africa.” Africa accounts for 15% of the world population and 34% of its usage of “traditional” fuels. This has to change, primarily due to the human costs of household pollution. Moving up the energy ladder is not negotiable.

The second answer above goes beyond the household and arises from an understanding of the underlying processes related to structural economic change. In short, economic development enables the decoupling of further increases in economic activity (and broad improvements in livelihoods) and carbon emissions. This is because development gives rise to less energy-intensive sectors, efficient use of energy, and the ability to invest in cleaner energy (including renewables).

Trends in emissions and GDP. Source: IEA

All else equal, the decoupling of emissions from economic activity appears to be greater at higher levels of income (see above). Perhaps those who do not care about energy poverty in the Continent hope that the region’s governments will continue to preside over poor low-energy economies. But I wouldn’t bet on it. The region’s demographics and urbanization trends point to a future when governments will no longer be able to get away with policies that condone energy poverty.

Most high-income countries have already seen their peak total emission levels (see above). The challenge for the world is whether collective action will ensure that current developing countries’ emissions peak at lower levels of emissions, even as their populations continue to grow. Potential ways of achieving this outcome include subsidizing the electrification of households, industrial activity, and transportation (especially trains!!!), sharing green technologies (especially solar, wind, and pumped-hydroelectric storage), and investing in battery research.

Widespread electrification would ensure that even in economies that currently use “dirty” sources of power would be able to quickly transition once cleaner power sources comes online (for example, despite their continuing high dependence on coal (74.3%), we should all celebrate India’s electrification of 94% its rail network). More people need to know that electrification is is the first step towards energy efficiency.

III: When people aren’t bothered by the fact that endemic energy poverty is a binding constraint to economic growth and development

Energy poverty is not a viable climate strategy. There is no shortcut to achieving broad-based economic development (including increased industrial capacity for mass job creation) without solving for reliable energy access (green or not). For example, research shows that unstable power access is a cause of significant job losses in African economies. Electricity outages increase unemployment by between 4.7-13.5 percentage points, effects of which are largely concentrated in non-agricultural sectors that employ skilled workers. Private sector employees are the worst affected. Furthermore, unreliable power supply decreases the entry of new firms, reduces the productivity of incumbent firms, and suppresses labor demand.

With figures like these, how are the 10m Africans that enter the labor force each year supposed to earn a living? How will African economies be able to serve the 600m who lack access to reliable electricity throughout the region?

It is a no-brainer than the only climate plans worth pursuing are those that prioritize ending energy poverty. First, such plans would correctly internalize the welfare implications of energy poverty. Second, climate plans that end poverty will be self-enforcing in the long-run by facilitating growth and ensuring structural decoupling of future increased economic activity from levels of emissions.

Current approaches in the region fall far short of the goal of ending energy poverty. A common theme across initiatives tends to be a fixation on goals, without a firm grasp about specific steps needed to achieve them. To illustrate, consider the example of the World Bank’s Country Climate and Development Report for Liberia:

The report provides lots of scary figures. Rice production (Liberia’s staple) could shrink by up to 13% between 2041-2050. Climate change could reduce GDP by 15% by 2050. 90% of rural households use wood for cooking and 70% or urban households use fuel coal or charcoal. 75% lack access to clean water. Electricity access is at 28%. Only 0.4% have access to clean cooking fuels.

There also proposed solutions which, given the figures above, are thoroughly underwhelming. 60% of households currently using wood or charcoal are supposed to get “energy efficient” cook stoves by 2030. Increasing electricity access is acknowledged as a goal, but only in passing because “it needs to be accompanied by a dedicated clean cooking agenda that offers affordable and desirable energy alternatives.” Forget that champions of cookstoves’ impact on emissions “are probably overstating their beneficial impact on the climate by an average of 1,000%.”

Perhaps the most glaring omission in the report is any serious discussion of Liberia’s crushing levels of energy poverty and the need to end it (not to mention the how). Instead, there is discussion of the need to decarbonize the power sector and mining operations. Forget that on a per capita basis Todd’s fridge consumes 2.6 times as much electricity as Liberia generates; or that per capita energy consumption is about a quarter of what it was in 1980. There is also almost no discussion of how current climate goals fit within Liberia’s development strategy (although to be fair, this is partially on Liberian policymakers). Finally, the preparation of a climate finance policy framework is prioritized — touching on everything from accessing foreign lending to disaster risk financing to Central Bank regulations. The latter is likely to consume valuable policymakers’ time, while in the end doing little more than handing over the country’s land with no real impact on energy access and human welfare.

Overall, and as illustrated in the table above, the World Bank’s foray into climate change will merely crowd-in existing programs (e.g., WASH, gender, infrastructure, etc) and infuse them with climate checkboxes. I am open to persuasion, but right now all of this looks and feels like rearranging the deck chairs on the Titanic.

IV: Conclusion

Low-income countries would be better off if entities like the World Bank championed an aggressive Growth for the Climate agenda that explicitly prioritized the need to end (energy) poverty as a way to tackle climate change. Such an approach, especially if coupled with growth-oriented bilateral energy access programs (like the one proposed here), would be a more credible means of putting economies like Liberia’s on a green path. Otherwise, politicians will sign onto policy commitments that generate quick cash (and lots of conferences and workshops) in the short-term, but that will ineluctably be abandoned on first contact with the realities of state capacity (both fiscal and administrative) and political incentives.

At the end of the day, though, it is up to politicians and policymakers in low-income states to prioritize ending energy poverty. Their policy posture ought to reflect an understanding that energy poverty kills people and jobs. They should also understand that external actors will always seek to externalize their own domestic priorities (it follows that multilaterals will reflect the priorities of those that fund/control them). The guiding principle should be that growth and development today (on the back of reliable energy access) is the best insurance against the impacts of climate change tomorrow.

Notice that at current trends 560m Africans will still be without electricity access in 2030.

For perspective, it’s always worth recalling that “even if African countries were to exploit all proven natural gas reserves, the region’s emissions would still only constitute 3.5% of the global total, against an 18% population share.” Which is to say that the region’s prevailing policy mimicry around the global climate emergency is totally unwarranted.