Energy as it relates to Poverty Alleviation and Environmental Protection (UNDP, 1998, 36 p.): Key Energy Issues as They Relate to Poverty and Environment: For the poorest of the poor, small improvements in commercial energy services produce large welfare benefits

Energy as it relates to Poverty Alleviation and Environmental Protection (UNDP, 1998, 36 p.)

Key Energy Issues as They Relate to Poverty and Environment

		(introduction...)
		Inefficient and environmentally harmful energy use
		First-cost effect generates poverty-energy-environment lock-in
		For the poorest of the poor, small improvements in commercial energy services produce large welfare benefits
		Conventional energy paradigm contributes to perpetuation of poverty
		Environmental problems such as urban air pollution and climate change affect people living in poverty more directly due to current patterns of energy usage
		Inordinate expenditure on energy

For the poorest of the poor, small improvements in commercial energy services produce large welfare benefits

There is sufficient evidence that small improvements in the level of energy services available to people living in poverty could generate dramatic changes in their quality of life. Cross-country comparisons indicate a positive correlation between access to energy and electricity services and educational attainment and literacy among both the rural and urban poor. This may be because families lacking adequate energy supplies will tend to limit children's time spent on schoolwork and reading; in extreme cases, families may withdraw children, especially girls, from school to spend time on fuelwood and dung collection.

The Human Development Index (HDI) developed by UNDP is a composite measure of development based on indicators of longevity, knowledge and standard of living. The components used for calculating HDI are life expectancy, educational level (adult literacy and years of schooling), and per capita gross domestic product (adjusted for purchasing power parity). Figure 4 is based on data from 100 developed and developing countries and shows the relationship between HDI and per capita commercial energy consumption (Suarez, 1995). Note that there is a steep increase in HDI as per capita energy consumption increases in countries whose per capita energy consumption is less than about 1 ton of oil equivalent (i.e., the vast majority of developing countries). If one views this relationship in causal terms, then it could be argued that modest increases in per capita energy consumption for the poorest countries can lead to tremendous improvements the quality of life of people living in these countries. By contrast, further increases in energy consumption in countries that already have moderate to high levels of HDI will probably cause few, if any, increases in HDI.