Roberto Barrella
Researcher at the Chair of Energy and Poverty at Comillas Pontifical University
This is a study with good scientific quality and high potential to serve as an international reference on the impact of the global energy crisis derived from the conflict between Russia and Ukraine. The databases used for the analysis - Global Consumption Database (World Bank, 2022) and The Global Trade Analysis Project (GTAP) Data Base - contain relevant and statistically sound information.
One of the most interesting findings is the comparison of the distribution of the energy burden between high- and low-income countries: energy inequality (in terms of disproportionate expenditure in proportion to income) is more acute in developed countries, i.e. poorer households have a much higher share of expenditure in income than high-income households. This result is in line with the findings of the annual energy poverty report of the Chair on Energy and Poverty on the disproportionate expenditure of Spanish households: the Spanish report points to a higher energy burden (relative to income) for households in the lowest income deciles. On the other hand, the Chair's study highlights that many of these low-income households tend to reduce their energy expenditures well below their needs, thus finding themselves in a situation of hidden energy poverty.
From another perspective, at both ends of the economic classification of the countries in the international study, there is a much higher weight of the indirect or secondary burden, i.e. goods and services that are not primary fuels (electricity is included in these goods). Along these lines, the Red Cross has launched a study in Spain to analyse the impact of the inflationary crisis on the economies of vulnerable households, in particular on energy poverty.
Another piece of data from the study published in Nature Energy that aligns with the Spanish evidence is how this crisis is exacerbating global energy poverty (between 2.4 % and 7.9 % more of the world's population) and extreme poverty (between 1.2 % and 2.1 % more of the world's population).
A potential limitation of this study is the fact that the pre-crisis baseline scenario has been set with average prices in 2021. In many countries (including Spain), energy prices started to rise from mid-2021 onwards, driven by the post-pandemic economic recovery and tensions in world markets. Thus, the study may have underestimated the relative increase in energy prices, i.e. the authors' choice may have reduced the estimated impact of the energy crisis.
This quantitative study can improve the information we have on the impact of the energy crisis on household economies globally and help correct both short-term emergency response and medium- to long-term strategic planning.
Furthermore, the authors of the Nature Energy study conclude that the cost-of-living increases experienced by households around the world reflect the limited capacity of economic agents to adopt new technologies and switch to other fuels in the short term. Furthermore, the study sheds light on the multiple impacts of the conjunctural policies implemented by governments in several countries: this article highlights that, in the short term, they have alleviated the negative socio-economic consequences of this crisis, but the secondary effects of these measures could worsen our carbon dependence, slow down the energy transition and further delay already insufficient global efforts to mitigate climate change.