Fuel represents the most important item of expenditure for poor households, next to food. Yet, the urban poor face limited, inefficient and expensive energy options to meet their heating and lighting needs. Often forced to live in the most polluted neighbourhoods, they suffer most from combustion-related pollution. Failure to meet the energy needs of the urban poor is reducing the prospects of achieving the Millennium Development Goals of environmental sustainability and eradicating extreme poverty and hunger.

A research project from University College London’s Development Planning Unit (DPU) and Future Energy Solutions investigates the role of energy in the lives of poor urban dwellers in China, Ghana and Indonesia. The Indonesia and Ghana studies looks at the impact of energy-related price and availability shocks on households. The China study considers the effects of an energy efficiency project at a factory and of differential access to energy for urban and rural households in a small suburb of Guiyang city.

In all cases the poor pay more per energy unit than those using more efficient fuels and appliances and spend more time and effort obtaining energy than better-off households. For some poor Chinese families, almost half of all household expenditure is spent on fuel for cooking and heating.

The report describes how:

• In response to the removal of energy subsidies triggered by the 1997 Asian economic crisis, Indonesian households reduced energy consumption – cooking less frequently, using public transport less often and cutting down their use of electrical appliances. In Ghana those with assets were better able to withstand the shocks of electricity and petrol price hikes in 2001: residents in a community dependent on fishing were able to pass on increased energy costs to customers, while those who depended on unskilled labouring were strongly affected.
• China’s policy of discriminating against urban residents recently arrived from rural areas has denied them access to cleaner forms of energy and continued their dependence on sulphur-rich coal.
• Energy is vital to maintaining social capital: families feel ashamed when their electricity is cut off, extra-household links suffer when visits have to be reduced and pollution aggravates neighbourhood tensions.
• The poor find it hard to make the change to using more efficient modern fuels: in Ghana demand for fuelwood and charcoal keeps rising as the poor are unable to afford to switch to liquid petroleum gas, kerosene or electricity.

Energy analysts and planners must move towards a holistic understanding of the role of energy in achieving poverty alleviation objectives. They should:

• recognise that the long-term aspirations of poor urban households to access more convenient and less hazardous equipment and have improved education are being constrained by the high cost of energy
• calculate energy costs within the basic basket of goods and services for poor households in order to illustrate the vulnerability of poor households to increases in energy prices realise that the highly vulnerable are reverting to less efficient sources of energy, adding to pressure on natural resources as more firewood is cut and – in the case of China – soil, crops and water are polluted by soot from burning coal.

Energy cuts across all aspects of people’s lives. Energy policies that enhance sustainable livelihoods and do not contribute to vulnerability are required. While restructuring of commercial energy markets may introduce savings and efficiencies, without better regulation the poor will be left at the mercy of market forces.

Source(s):
‘Energy, poverty and sustainable urban livelihoods: Final Technical Report (Outcomes 1,2 and 3) by Sheilah Meikle and Alison Bannister, March 2003

Funded by: DFID R7661 (IUDD)

id21 Research Highlight: 19 May 2004

Further Information:
Sheilah Meikle
Development Planning Unit
University College London
9 Endsleigh Gardens
London WC1 H 0ED
UK

Tel: +44 (0) 20 7679 1111
Fax: +44 (0) 20 7679 1112
Contact the contributor: s.meikle@ucl.ac.uk

University College London

Alison Bannister
Future Energy Solutions
154 Harwell
Didcot
Oxfordshire
OX11 0QJ
UK

Tel: +44 1235 432035
Fax: +44 1235 433548
Contact the contributor: alison.bannister@aeat.co.uk

Future Energy Solutions, UK

Other related links:
'Powering rural development: energy management in African schools and hospitals'

'Left on the back burner: time to put energy onto the urban planning agenda?'

'A burning issue: promoting sustainable pro-poor access to affordable energy'

'The challenges of rural energy poverty in developing countries'

'Energy and poverty reduction: the role of women as a target group'