Energy Poverty Then and Now

How Coal Proponents Have it Wrong

Institute for Energy Economics and Financial Analysis, March 2016

The promise of coal—past, present and future—is that it can bring affordable electricity to everyone. It’s a promise based in myth, however, a story that overlooks costs to public health and the environment and that ignores how coal-fired electricity puts entire economies and national energy security at risk.

Perhaps the most vocal promoter of the coal myth is Peabody Energy, which promotes coal—its bread and butter—as the solution to global “energy poverty.”

Peabody’s pitch vastly overstates the role coal can actually play today in bringing people out of energy poverty, which, to be sure, is a challenge. But no two countries hobbled by energy poverty are alike, and it’s a problem best tackled nation by nation. Coal dependence in many cases constitutes reliance on a resource that must be imported or at least transported from one region of a country to another section of that same country. It’s an ultimately economically damaging arrangement, especially considering the alternatives. Wind, solar and energyefficiency program are always rooted in local resources, and energy money doesn’t get exported just to buy fuel. Rather it stays, supporting local and regional economies and the people who live and work in those economies.

This paper, based on IEEFA’s ongoing quantitative analysis of the coal industry, outlines in a qualitative way the links between energy poverty, economic poverty and economic development that form the backdrop today to the debate over coal-fired power generation. We see limitations on coal as a development tool and we note its modern impact on poor people in a wide range of different countries with many different cultures, political histories and approaches to market development.

Read the full report.