Conflict costs measured
British scientists have calculated how much the war in Ukraine has affected global energy prices.
The total cost of energy for households has likely increased between 62.6 per cent and 112.9 per cent since Russia invaded Ukraine, say international researchers.
Russia’s invasion of Ukraine caused global energy prices to rise dramatically in 2022, exacerbating existing price increases due to rising demand from the post-pandemic economic recovery.
Households saw increases in their energy bills for heating, cooling, and mobility as well as in the cost of other goods and services throughout global supply chains.
As a result many governments introduced support packages to help households and businesses.
Researchers at the UK’s University of Birmingham modelled the direct and indirect impacts of increased energy prices on 201 expenditure groups (representing populations with different consumption levels in half-percentiles) from 116 countries, covering 87.4 per cent of the global population.
They constructed energy price scenarios for coal and coal products, crude oil and petroleum products, and natural gas based on their average prices across different periods between February and September 2022.
This was combined with a multi-regional input–output method to estimate how these price changes impacted household energy costs.
The authors suggest that the total energy cost for households increased by 62.6 to 112.9 per cent. This contributes to an up to 5 per cent increase in household expenditure. They estimate that an additional 78 to 141 million people worldwide could be pushed into extreme poverty as a result of these increases.
The authors indicate that targeted energy assistance could aid vulnerable households and highlight the need for support due to the increased costs of necessities such as food.
They emphasise that short-term policies addressing the cost-of-living crisis must be in line with climate-mitigation goals and other long-term sustainable development commitments.
They conclude that multilateral action is needed to address inequalities in accessing affordable energy globally.
The full study is accessible here.