Burden of the global energy price crisis on households

[oil&gas]

16 Feb, 2023

Abstract

The Russia–Ukraine confict has triggered an energy crisis that directly
afected household energy costs for heating, cooling and mobility and
indirectly pushed up the costs of other goods and services throughout
global supply chains. Here we bridge a global multi-regional input–output
database with detailed household-expenditure data to model the direct and
indirect impacts of increased energy prices on 201 expenditure groups in 116
countries. On the basis of a set of energy price scenarios, we show that total
energy costs of households would increase by 62.6–112.9%, contributing to
a 2.7–4.8% increase in household expenditures. The energy cost burdens
across household groups vary due to diferences in supply chain structure,
consumption patterns and energy needs. Under the cost-of-living pressures,
an additional 78 million–141 million people will potentially be pushed
into extreme poverty. Targeted energy assistance can help vulnerable
households during this crisis. We emphasize support for increased costs of
necessities, especially for food.
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Burden of the global energy price crisis on households - Nature Energy

The Russia–Ukraine war triggered an energy crisis that affected the cost of many goods and services. Guan et al. model the direct and indirect impacts of increased energy prices across expenditure groups and countries, finding temporary increases in total household energy costs of 63–113% under...

www.nature.com

 

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[oil&gas]

Soaring energy costs could push 141 million into extreme poverty, report says

Tara Subramaniam
Feb 17, 2023

The energy crisis triggered by Russia’s war in Ukraine 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 Russia’s invasion of Ukraine, 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 US 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 items will rise further this year.

“Like all the consumers around the world, we’ve been hit by inflation and now we’re trying to repair the damage that has been done,” Nestlé CEO Mark Schneider said on a call with reporters Thursday, though he declined to say which of the company’s 2,000 brands, which span frozen food, confectionery and baby formula, would be affected by price increases.

On a call last week, Unilever’s chief financial officer Graeme Pitkethly told journalists, “We’re probably past peak inflation, but we’re not yet at peak prices.” Unilever’s CEO said on the same call that the company expects food prices to increase significantly in 2023.

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.

https://www.cnn.com/2023/02/17/energy/energy-costs-ukraine-war-millions-poverty-report-intl-hnk/index.html

 

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Soaring energy costs could push 141 million into extreme poverty, report says

More gloating from the people are pushing more than that into poverty already through climate change.