Could carbon pricing enhance energy poverty?

A coal power plant. Could carbon pricing shut off the poor from access to energy? Photo by: martin / CC BY-ND

Scientists and development institutions agree that putting a price on carbon is one of the most effective ways to fight climate change.

World Bank Vice President and Special Envoy for Climate Change Rachel Kyte has called it a “fundamental step,” but according to top energy researchers, carbon pricing could shut off the poor from access to energy such as basic lighting.

Keywan Riahi, energy program director at the International Institute of Applied Systems Analysis, warned that stringent carbon pricing policies would disrupt upward-moving trends toward universal energy access.

“There could be a tradeoff between energy poverty and climate policy,” he said Wednesday during a conference hosted by the World Bank.

However, if certain strategies are implemented to offset this effect, Riahi explained, policies could integrate both climate priorities and energy access concerns to provide a solution and thus reduce greenhouse gas emissions while connecting the poor. One way to do this would be redistribute to the poor a fraction of carbon pricing revenues.

Such a policy, though, would be a hard sell to many capitalist countries, and as senior World Bank economist Gabriela Inchauste pointed out, many developing countries don’t have systems in place to allow for that redistribution.

Inchauste emphasized the need for more country-level analysis and studies on both climate change and energy poverty in order to shed some light on exactly what programs can be effective, and where.

Do you think climate change policies can be enacted in a way that preserves energy access for the poor? Let us know your thoughts by leaving a comment below.

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About the author

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    Jeff Tyson

    Jeff is a former global development reporter for Devex. Based in Washington, D.C., he covers multilateral affairs, U.S. aid, and international development trends. He has worked with human rights organizations in both Senegal and the U.S., and prior to joining Devex worked as a production assistant at National Public Radio. He holds a master's degree in journalism from Columbia University and a bachelor’s degree in international relations and French from the University of Rochester.