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 UK, China and the US modeled the impacts of rising energy prices across 116 countries and found that household spending increased by an average of 4.8% as coal and natural gas prices soared. after the Russian invasion of Ukraine, an effect that joined the post-pandemic increases.
In low-income countries, the report said poorer households already facing severe food shortages are 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 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 these countries rely more on energy-intensive industries.
Poland, in particular, relied on coal for 68.5% of its power generation, as of 2020.
Increases in energy prices caused by the crisis in Ukraine have also resulted in rising costs of necessities such as food.
In relation to the previous year, in the USA the prices of eggs rose 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 In this month.
And consumer goods companies say prices aren’t likely to drop any time soon.
On Thursday, the CEO of Nestlé, the world’s largest food group, echoed other consumer giants such as Unilever and Proctor & Gamble in warning that the price of basic items will rise further this year.
“Like all consumers around the world, we have been hit by inflation and are now trying to repair the damage that has been done,” Nestle CEO Mark Schneider said on a conference call with reporters on Thursday, although he declined to say which of the company’s 2,000 brands, which span frozen foods, confections and baby formula, would be affected by price increases.
At a conference last week, Unilever CFO Graeme Pitkethly told reporters: “We’re probably past the peak of inflation, but we’re not at the peak of prices yet.”
At the time, the CEO of Unilever said that the company expects food prices to increase significantly in 2023.
According to the report, many governments around the world have already taken measures to lessen the impact of rising energy prices on homes, from lowering energy taxes and energy bill rebates to targeted subsidies and price caps.
But the report suggests more could be done, such as establishing price subsidies, imposing windfall taxes on energy companies and passing legislation to use more sustainable energy sources along food supply chains.
The report adds that this energy crisis should serve as a reminder of the risks of “an energy system highly dependent on fossil fuels”.
Not only does this leave millions on the brink of extreme poverty, it also accelerates climate change, which poses more challenges for those most vulnerable to rising energy prices.
Source: CNN Brasil
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