Humanity, including the world's poorest people, will be much better off in a 'fossil fueled development' scenario than under a sustainable scenario of a lower CO2 world
As renewable energy mandates are rising 'ecological' taxes have driven up electricity prices, and increases in energy poverty has become a problem in countries such as Germany and the United Kingdom. There are varying definitions for the term, but the newly launched European Union Energy Poverty Observatory defines energy poverty as not being able to afford adequate warmth, cooling, lighting, or the energy to power appliances that guarantee a decent standard of living and health. One shorthand rule is that a household is energy poor if it must spend more than 10 percent of its income on power. The Observatory estimates that 50 million European households now qualify. 1
Ronald Bailey reports, “Energy electricity prices are regressive—poorer people pay a higher proportion of their income heating and cooling their houses than do richer people. Low-income folks also tend to live in draftier dwellings and retain older, less energy efficient appliances and climate control systems. Consequently, anything that raises the price of power will impose bigger relative costs on the poor.” 1
Germany's energy actions (Energiewende) are a raft of different policies that can be boiled down to the following plan: phase out nuclear energy while boosting wind and solar by guaranteeing producers long-term, above market rates called feed-in tariffs. 2
Due largely to Energiewende, German residential electricity rates have doubled since 2000. Today households pay about 36 cents per kilowatt-hour. About 11 cents, or well over half the increase, comes from a renewable energy surcharge and an ecological tax.
Every year 600,000 households (2 million people) are getting their power switched off in Germany because they can't afford the sky rocketing electric bills. Electricity prices have now reached a level triple those paid in the United States.3
A 2017 study found that the proportion of households in Germany spending more than 10 percent of their income on energy tripled form 7.5 percent in 1998 to 22 percent in 2013.
The situation for Germans will likely get a lot worse before it gets better. Less than a third of the country's power is supplied by wind and sun, and as that share rises—as is planned—the costs will only continue to climb and make the hardship for the poor even worse. 4
The German government plans for spend $40 billion over four years to help the country cut its carbon dioxide emissions. Such measures will likely reduce the global rise in temperature by 0.00018 C in a hundred years, an immeasurably small gain for such a large cost. By contrast, spending the same amount on preventing tuberculosis in developing countries could save more than ten million lives. 5
United Kingdom, Ireland and Spain
In Britain, the price of residential electricity has increased by 27 percent in just a decade. Households now pay nearly 22 cents per kilowatt-hour with energy and climate change policies accounting for about 10 percent of that amount. The UK changed the way it measures fuel poverty in 2012, but a rough calculation suggests that the proportion of households paying over 10 percent rose from 6 percent in 2003 to around 20 percent in 2015. 1
In February, the National Energy Action nonprofit estimated that the UK experiences 32,000 'excess deaths' each winter and the 9,700 of them are attributable to living in cold homes.1
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The UK has the second worst rate of excess winter deaths in Europe, a study by National Energy Action and climate change charity E3G found. Campaigners are calling for action to end entirely preventable tragedy that kills as many people as prostate cancer or breast cancer. A total of 168,000 excess winter deaths have been recorded in the UK over the latest five year period. Of 30 countries studied, only Ireland has a higher proportion of people dying due to cold weather. 6
In 2014 more than 7,000 people died in Spain from causes associated with energy poverty. 11% of households in Spain, 5.1 million people declare to be unable to maintain their housing at a suitable temperature. 7
United States
Meanwhile, the average real price of residential electricity electricity in the United States fell by nearly half, from 22 cents in 1960 to 12 cents in 2005. Since then, the price has stalled at around 13 cents per kWh.1
Still, a residential energy consumption survey found in 2015 that 'about one in five households reported reducing or forgoing basic necessities like food and medicine to pay an energy bill.' A 2014 while paper released by the Senate Committee on Energy and Natural Resources calculated that for every 10 percent increase in home energy costs, 840,000 Americans would be pushed below the poverty line. 1
Paris Agreement
A new study suggests that the massive cost of reducing emissions under the Paris agreement will lead to an increase in poverty of around 4%. 8
The finding is consistent with other studies of the effects of climate policies on poverty, including the research project undertaken for the United Nations Intergovernmental Panel on Climate Change (IPCC) that maps five alternate global futures. This study shows that humanity, including the world's poorest people, will be much better off in a 'fossil fueled development' scenario than under a sustainable scenario of a lower CO2 world. And this holds true even after accounting for climate change.9
References
Ronald Bailey, “Renewable energy mandates are making poor people poorer,” Reason, June 2018
“Germany's Energiewende finds the sour spot,” the-american-interest.com, June 30, 2015
Stephen Moore, “Europe's lesson teaches us: don't go green,” townhall.com, May 14, 2017
P. Gosselin, “Germans unable to pay power bills, electricity prices have more than doubled,” notrickszone.com, April 9, 2019
Bjorn Lomborg, “How climate policies hurt the poor,” project-syndicate.org, September 26, 2019
Ben Chapman, “Fuel poverty crisis: 3,000 Britons dying each year because they can't heat their homes, study shows,” The Independent, February 22, 2018
Carlos Sanchez, “7,000 premature deaths are associated with energy poverty,” Energy News Todo Energia, April 25, 2016
Lorenza Campagnolo and Marinella Davide, “Can the Paris deal boost SDGs achievement? An assessment of climate mitigation co-benefits or side-effects on poverty and inequality,” World Development, 122, 96, October 2019
Keywan Riahi et al., “The shared socioeconomic pathways and their energy, land use, and greenhouse gas emissions implications: An overview,” Global Environment Change, 42, 153, January 2017
Jack Dini is author of Challenging Environmental Mythology. He has also written for American Council on Science and Health, Environment & Climate News, and Hawaii Reporter.
As renewable energy mandates are rising 'ecological' taxes have driven up electricity prices, and increases in energy poverty has become a problem in countries such as Germany and the United Kingdom. There are varying definitions for the term, but the newly launched European Union Energy Poverty Observatory defines energy poverty as not being able to afford adequate warmth, cooling, lighting, or the energy to power appliances that guarantee a decent standard of living and health. One shorthand rule is that a household is energy poor if it must spend more than 10 percent of its income on power. The Observatory estimates that 50 million European households now qualify. 1
