Beyond the fact that poor people just have less money to spend in general (that’s what it means to be poor), the greater cost of their energy sources is one reason why energy consumption is a lot lower in poor countries than in rich ones. World Bank data suggest that, every year, people in low-income countries (with average GDP per head below about $1,000) use energy equivalent to that produced by burning 364 kilograms of oil. Those in middle-income countries use up nearly four times as much—the equivalent of 1,254 kilograms, or a little more than a metric ton. The same figure for high-income countries is more than five tons.
From an environmental perspective, of course, it is probably a good thing that poor people use less energy. If they were using candles to light their houses anywhere near as brightly as rich people do using light bulbs, they’d be consuming 50 times the energy to do so—and that would mean a lot more carbon dioxide and other greenhouse gasses in the atmosphere (alongside a candle collection that would do shame to Methuselah’s birthday party).
Though it would be wonderful for poor people if they were all connected to the electricity grid, it could be devastating news for the global environment. According to World Bank data, the limited electricity sectors of low-income countries currently rely for nearly half of their power on hydroelectric sources, compared with about 7 percent from coal. If they were producing a lot more electricity, doubtless most of that power would come from fossil fuels. In middle income countries, for example, it is coal that accounts for nearly half of all electricity production, with hydro providing one-fifth. Fossil fuels as a whole account for only 30 percent of low income energy consumption compared with more than 80 percent in middle-income countries.
For all of the misery suffered by generations without electricity, at least the world has dodged one bullet—a huge legacy stock of dirty power plants in low-income countries belching out CO2 for the rest of their 30-year lives. But that silver lining on the cloud of global energy poverty may be about to fray because the cloud itself is evaporating. Many of the poorest of the world’s people are at last becoming richer—and they are going to demand more energy as a result.
Xavier Sala-i-Martin and Maxim Pinkovskiy of Columbia University and the Massachusetts Institute of Technology estimate that Africa will halve the number of people living on $1.25 or less—the global definition for absolute poverty—between 1990 and 2017. And the number of countries worldwide classified as low-income by the World Bank has fallen from 63 in 2000 to 35 this year. We’ve seen those are the countries that largely rely on hydro power rather than fossil fuels (think the Nam Theun dam in Laos or the Inga Dams in the Democratic Republic of Congo). And middle-income countries consume four times the energy. Absent new technologies that produce cleaner power for all of these richer countries, the global environment will be in even more dire straits than it is already.
Mercifully, just as the developing world is getting a lot more energy-hungry, methods to get that power from off-grid energy-efficient and environmentally sustainable sources are coming to the market. For example, solar lanterns—which use solar cells to charge a battery that powers an LED at night—are now available for less than $20. The payback period for buying that solar lantern rather than a cheaper kerosene model and the fuel to power it will fall from seven months today to below two months in 2015. And whole solar panels cost 40 percent of what they did a mere two years ago. In India, a panel costs about $300, the cost of a year’s supply of kerosene for a lamp—but the panel provides sufficient electricity for a battery to power a number of considerably brighter lights. More broadly, developing countries are spending more than rich countries on new renewable capacity—$72 billion in 2010. David Wheeler at the Center for Global Development suggests India plans to generate 15 percent of its energy from renewable sources by 2020, mostly from solar. The IPCC reckons that renewables could be delivering as much as 80 percent of the world’s power by midcentury.
If we do manage this energy transformation, the world will have achieved a stunning combination of victories. First, over the energy poverty and poor health of those billions relying on dangerous, inefficient traditional sources and, second, over the greenhouse gas excess of those consuming power from burning stuff—be it dung, wood, coal, or oil. Making this conversion happen surely seems worth the odd carbon tax or renewable subsidy.