|Migrant Workers Cooking-India: Photo WB/Curt Carnemark|
- Minimum amount of physical energy necessary for basic needs such as cooking and lighting;
- Type and amount of energy that is used for those at the poverty line;
- Households that spend more than a certain percent of their expenditure on energy;
- The income point below which energy use and or expenditures remains the same, implying this is the bare minimum energy needs.
The second approach of defining the energy poverty line as the energy being used by households below the known expenditure or income poverty line is much easier to grasp. The expenditure based poverty line is well defined in most countries, so based on a household energy survey you assess the average fuel use below this level. This is fairly attractive because it is not necessary to actually measure how much energy people are using. However, this method also has the drawback that you are defining energy poverty based on more general critera as opposed on an energy basket of goods and services. This means that such a poverty line would not be based on the energy policies in the country, but rather would reflect general economic and social policies. Tracking energy poverty with this method would be no more than tracking general poverty trends. This method is not so useful for those that might want to tack the impact of energy sector reform.
The third line of thought is that the energy poverty should be based on the percentage of income spent on energy. It is well established that households that are poor spend a higher percentage of their income on energy than households that are wealthier. Empirical studies including ones I have done indicate that such percentages can range from about 5% or less to close to 20% of cash income or expenditure. It seems that when energy is above 10% of income, then conceivably it will begin to have an impact on general household welfare. The idea is that when households are forced to spend as much as 10% of cash income on energy they are being deprived of other basic goods and services necessary to sustain life. The drawback to this approach is that 10% is a rather arbitrary figure. So it suffers to a certain extent from the same problems as the methods based on physical measures of energy.
|Rural Bangladesh End Use HH Energy Per Capita Per Month|
by Income Decile. Source: Rural Energy Survey 2005
Here are a few publications on this topic that are available in PDF form. Many of the thoughts in this post are the results of research conducted with Shahid Khandker and Hussain Samad. There are other articles available, but most are copyrighted, so if the authors have a PDF that can be published, I will list them.
Energy Services for the Millennium Development Goals. Link to PDF
Energy Prices, Energy Efficiency, and Fuel Poverty. Link to PDF
Energy Access, Efficiency, and Poverty: How Many Households Are Energy Poor in Bangladesh? Link to PDF
So what do you think? Please take the poll and give opinions below. Keep in mind that this is a current topic of discussion and there are no correct answers.