Soaring Energy Costs Could Push 141 Million Into Extreme Poverty, Report Says

Date: 18 February 2023 - 21:44

News ID: ۱۱۲۵۲۳

WASHINGTON (CNN) — The energy crisis triggered by Russia, Ukraine war could push 141 million people worldwide into extreme poverty, according to a new report published Thursday in the journal Nature Energy.
Researchers from the Netherlands, the United Kingdom, China and the United States modeled the impacts of increased energy prices in 116 countries and found household spending increased up to 4.8% on average, as coal and natural gas prices surged after the war, adding to post-pandemic increases.
In low-income countries, the report said poorer households already facing severe food shortages were at greater risk of poverty due to higher energy costs. Households in higher income countries also felt the impact of rising energy prices but were more likely to be able to absorb them into household budgets, the report said.
And some countries are more exposed than others – for example, increases in energy costs in Estonia, Poland and the Czech Republic are above the global average, mainly because those countries rely more on energy-intensive industries. Poland in particular relied on coal for 68.5% of its energy generation, as of 2020.
Energy price hikes caused by the crisis in Ukraine have also resulted in the increased cost of necessities like food. Compared to a year ago, in the U.S. the prices of eggs went up 70.1%, margarine 44.7%, butter 26.3%, flour 20.4%, bread 14.9%, sugar 13.5%, milk 11%, chicken 10.5% and, together, fruit and vegetable prices increased 7.2%, according to inflation data released by the Bureau of Labor Statistics this month.
And consumer goods companies say prices are unlikely to fall any time soon.
On Thursday, the CEO of Nestlé, the world’s largest food group, echoed other consumer giants like Unilever and Proctor & Gamble to warn that the price of staple data-x-items will rise further this year.
According to the report, many governments worldwide have already taken steps to lessen the impact of soaring energy prices on households, from reducing energy taxes and providing energy bill discounts to one-off energy subsidies and price caps.
But the report suggests more could be done, such as setting price subsidies, imposing windfall taxes on energy companies, and passing legislation to use more sustainable sources of energy along food supply chains.
The report adds that this energy crisis should serve as a reminder of the risks of “an energy system highly reliant on fossil fuels.” Not only does it leave millions on the brink of extreme poverty, but it also accelerates climate change, which poses more challenges to those most vulnerable to rising energy prices.