The clock is ticking on the issue of energy poverty

Source: The post is based on an article “The clock is ticking on the issue of energy poverty” published in the Indian Express on 9^th July 2022.

Syllabus: GS 2 International Organization; GS 3 Indian Economy issues and Challenges to growth, development, etc.

Relevance: Global Energy Governance; Energy Poverty, etc.

News: In the recently concluded G-7 Summit, the Prime Minister of India Modi reminded the leaders of the richest economies in the world that all the energy-poor countries should also be able to access energy as much as the rich global north.

The PM raised the bigger issue of global energy governance at G7 because all world energy systems are still tightly controlled by the Atlantic countries. The American dollar runs the global energy landscape.

The western countries build and push all global energy narratives in order to serve their own economic and geopolitical interests. For example, the International Energy Agency (IEA) serves the interests of the rich and developed countries.

What is the status of energy poverty globally?

The Latin American, Asian, and African regions account for around three billion energy-poor people.

In South Asia alone, over one billion people are struggling with extremely limited access to energy, despite the LPG and the LED revolutions in India.

What could be the implications of energy curbs imposed by western nations?

India and many other developed countries have been purchasing discounted Russian oil amid the increasing crude oil prices. But, the G-7 countries want to further tighten the sanctions or completely curb the flow of Russian oil in the global supply system. It would have many implications:

First, Russia accounts for 12.6% of the world’s oil production. It could lead to even higher oil prices. Sri Lanka-like energy shocks may disrupt the nations due to these factors.

Second, a ban could also strengthen the emergence of a parallel international oil market led by Russia and, allegedly, supported by China.

Third, unlike rich countries, most energy deficit countries in the developing world cannot tackle a slump in growth; rise in inflation and unemployment rate, and social unrest. For example, India’s oil import bill soared to $119 billion in the FY2021-22.

What should be done?

Energy access should not be the privilege of the rich only. A poor family also has the same rights on energy.

The G-7 should explore some other ways to tighten the sanctions on Russia instead of weaponizing oil.

Undoubtedly, the world needs a truly global intergovernmental organization dedicated to just energy transition, energy access and justice, and energy and climate. For this, India and China should take the lead. Other large countries like Indonesia, South Africa, and Turkey could also be invited to brainstorm for initiating such a body.

Powerful platforms like the G-20 and the BRICS need to focus more on energy access, poverty, and security.