Russia-Ukraine war putting 141 million people into ‘Extreme Poverty’

High energy prices caused by the Russia-Ukraine war could push millions of people around the world into extreme poverty, according to a new study by researchers from Europe, China and the US.

The team estimated that total household energy costs have increased between 63 and 113 per cent since last February, forcing families to pay significantly more for fuel and utilities as well as food and other goods that are part of the global supply chain. Their findings were published in the journal Nature Energy on Thursday.

“As surging energy prices affect different populations in different ways, we hope to identify vulnerable households and help policymakers provide more targeted support,” said co-author Shan Yuli, a climate change expert at the University of Birmingham in Britain.

“While the energy crisis worsens extreme poverty worldwide, it also provides an opportunity to accelerate energy transitions in Europe and elsewhere in the world,” said Guan Yuru, a co-author of the paper and PhD student at the University of Groningen in the Netherlands.

In an interview on Wednesday, Shan and Guan recalled how the war had affected their daily expenditures.

“I found myself paying twice as much for electricity for the house as well as for petrol for my car,” said Shan.

Guan, who was renting a flat and did not need to pay for utilities, said she was shocked by the vegetable prices and empty shelves in the cooking oil section at local supermarkets.

“Personal experience prompted us to examine the impacts of soaring energy prices on different populations – especially indirect impacts such as food prices, which were rarely studied in previous research,” Shan said.

The researchers collected data and modelled direct and indirect impacts on households in 116 countries, covering nearly 90 per cent of the global population.

According to their models, that means an additional 78 million to 141 million people could be pushed into “extreme poverty”, as defined by the World Bank, with their daily purchasing power dropping below US$2.15.

They found that the rise in energy prices accounted for about 3 to 5 per cent of the increase in total household spending.

The cost-of-living crisis has forced some European countries to reactivate coal-fired power plants. Photo: Bloomberg
The cost-of-living crisis has forced some European countries to reactivate coal-fired power plants. 

The team found that households in sub-Saharan Africa were among the hardest hit.

“An interesting fact is that in low-income countries, unlike the rest of the world, richer households tend to bear higher energy cost burdens than poorer households,” Guan said.

She said while the cost-of-living crisis had forced some European countries to reactivate coal-fired power plants, it was important to align short-term policies with long-term climate mitigation goals.

“There is increasing awareness that a system that relies on fossil fuels is not reliable. In Europe, there have been new policies to speed up energy transitions and boost investments in renewable energies, which will hopefully lead a trend worldwide,” she said.

Arab Observer

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