Working Paper: NBER ID: w17747
Authors: Catherine Wolfram; Orie Shelef; Paul J. Gertler
Abstract: Most of the medium-run growth in energy demand is forecast to come from the developing world, which consumed more total units of energy than the developed world in 2007. We argue that the main driver of the growth is likely to be increased incomes among the poor and near-poor. We document that as households come out of poverty and join the middle class, they acquire appliances, such as refrigerators, and vehicles for the first time. These new goods require energy to use and energy to manufacture. The current forecasts for energy demand in the developing world may be understated because they do not accurately capture the dramatic increase in demand associated with poverty reduction.
Keywords: Energy demand; Developing world; Poverty reduction; Economic growth; Energy-using assets
JEL Codes: O13; Q47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased household income among the poor (D19) | increased energy demand (Q41) |
| increased household income among the poor (D19) | acquisition of energy-using appliances (L68) |
| acquisition of energy-using appliances (L68) | increased energy demand (Q41) |
| economic growth (O49) | energy consumption (Q41) |
| poverty alleviation (I32) | increased energy demand (Q41) |
| pro-poor growth (O20) | energy demand elasticity (D12) |
| higher rates of poverty reduction (I32) | higher income elasticities of energy demand (Q41) |