The Inequality and Poverty Dashboard

Policies for energy consumption and use have intertwined effects on inequality and poverty, an aspect which is often overlooked. As governments ramp up efforts to limit global warming to 1.5°C and accelerate the transition towards a clean energy future, it is essential to ensure that inequality and poverty considerations are placed at the heart of climate action.  A more systematic assessment of the social impacts of energy policies is needed to inform the design and adoption of equitable and socially acceptable policies. The Inequality and Poverty Dashboard addresses this by:

  • Providing an overview on the state of play of socio-economic inequalities and poverty in 30 countries covered by the Energy Policy Tracker
  • Sharing information on the likely effects of various types of energy policies on inequality and poverty, at the country level.

The full methodology of the inequality and poverty dashboard is available here. The report In Search of a Triple Win summarizes the main findings of the Inequality and Poverty Dashboard.




Inequality and Poverty Indicators

Gini Coefficient (2020)

The Gini coefficient shows the scale of inequality of the income distribution within a particular country. This indicator measures the extent to which the distribution of income among individuals or households within an economy deviates from a perfectly equal distribution, with an index of 0 representing perfect equality and 1 representing perfect inequality. Alternative indicators can be used to measure income inequality and each may lead to a different assessment of inequality in a country.

Gini Coefficient (2020):
  0.39 - 0.45  0.46 - 0.53  0.54 - 0.60  0.61 - 0.68  0.69 - 0.76

Source: World Inequality database https://wid.world/

Percentage change in Gini Coefficient (2008-2020)

This indicator shows the extent to which the Gini coefficient has changed, in percentage terms, from 2008 to 2020 for each country. A positive percentage indicates an increase in income inequality whereas a negative percentage indicates a decrease over time.

Change in Gini:
  -11.30 - -4.83  -4.82 - 1.65  1.66 - 8.13  8.14 - 14.61  14.62 - 21.10

Source: World Inequality database https://wid.world/

Per capita emissions of the top 10% to the bottom 50% of the population (2019)

This indicator shows the inequality of per capita emissions of the top 10% of income earners compared to the bottom 50%.

It reveals the ratio of per capita emissions of the top 10% income earners compared to the bottom 50% in 2019.

Inequalities in Emissions:
  4.00 - 5.59  5.60 - 7.19  7.20 - 8.79  8.80 - 10.39  10.40 - 12.00

Source: World Inequality database https://wid.world/

Poverty gap at 3.20$ (most recent available data)

This indicator shows the ratio of the number of people whose mean income falls below the poverty line (set at $3.20 a day and at purchasing power parity), and it is expressed as a percentage of the poverty line.

Poverty Gap:
  0.00 - 6.09  6.10 - 12.19  12.20 - 18.29  18.30 - 24.39  24.40 - 30.50

Source: World Inequality database https://data.worldbank.org/indicator/SI.POV.LMIC.GP

Electricity and energy access rates (most recent available data)

This indicator builds on electricity and energy access rate datasets. Electricity access shows the percentage of the population with access to electricity. Electricity access rates are provided for countries where electricity access is still not universal as well as the remaining countries where electricity access is universal but energy access is not measured consistently. Households' low absolute energy expenditure is used as a measure for energy access. Low absolute energy expenditure shows the percentage of households whose energy expenditure is below half the national median. Electricity access rates are provided for 2019 and energy access rates for 2015 and only in EU countries; for each country, it is specified which indicator is used.

Electricity Access:
  100.00 - 91.09  91.08 - 82.17  82.16 - 73.25  73.24 - 64.33  64.32 - 55.40
Energy Access:
  4.40 - 9.49  9.50 - 14.59  14.60 - 19.69  19.70 - 24.79  24.80 - 4.40

Source: WorldBank.org, European Commission

Argentina

Gini Coefficient 0.54
Change in Gini 1.9
Inequalities in emissions 4.8
Poverty Gap 1.5
Electricity Access 100

Australia

Gini Coefficient 0.5
Change in Gini 8.7
Inequalities in emissions 6
Poverty Gap 0.4
Electricity Access 100

Bangladesh

Gini Coefficient 0.53
Change in Gini -3.6
Inequalities in emissions 4
Poverty Gap 15.3
Electricity Access 92.2

Brazil

Gini Coefficient 0.68
Change in Gini 1.5
Inequalities in emissions 9
Poverty Gap 3.8
Electricity Access 99.8

Canada

Gini Coefficient 0.54
Change in Gini 1.9
Inequalities in emissions 6
Poverty Gap 0.2
Electricity Access 100

China

Gini Coefficient 0.56
Change in Gini 0
Inequalities in emissions 12
Poverty Gap 1
Electricity Access 100

Colombia

Gini Coefficient 0.64
Change in Gini -4.5
Inequalities in emissions 7
Poverty Gap 4.7
Electricity Access 99.8

Egypt

Gini Coefficient 0.6
Change in Gini 0
Inequalities in emissions 5
Poverty Gap 6.3
Electricity Access 100

Estonia

Gini Coefficient 0.48
Change in Gini -4
Inequalities in emissions 7
Poverty Gap 0,3
Energy Access 18.9

European Institutions

Gini Coefficient 0.5
Change in Gini -2.1
Inequalities in emissions 5.8
Poverty Gap
Energy Access 14.6

Finland

Gini Coefficient 0.45
Change in Gini 0
Inequalities in emissions 5.4
Poverty Gap 0.1
Energy Access 29.9

France

Gini Coefficient 0.43
Change in Gini -2.3
Inequalities in emissions 5
Poverty Gap 0
Energy Access 19.5

Germany

Gini Coefficient 0.48
Change in Gini 0
Inequalities in emissions 5.7
Poverty Gap 0.1
Energy Access 17.4

India

Gini Coefficient 0.63
Change in Gini 6.8
Inequalities in emissions 9
Poverty Gap 20.6
Electricity Access 97.8

Indonesia

Gini Coefficient 0.6
Change in Gini 0
Inequalities in emissions 12
Poverty Gap 4.5
Electricity Access 98.8

Italy

Gini Coefficient 0.44
Change in Gini 2.3
Inequalities in emissions 4.8
Poverty Gap 1.3
Energy Access 13.6

Japan

Gini Coefficient 0.54
Change in Gini -1.8
Inequalities in emissions 6.3
Poverty Gap 0.4
Electricity Access 100

Kenya

Gini Coefficient 0.6
Change in Gini -6.3
Inequalities in emissions 5
Poverty Gap 28.6
Electricity Access 69.7

Mexico

Gini Coefficient 0.68
Change in Gini -2.9
Inequalities in emissions 10
Poverty Gap 1.8
Electricity Access 100

New Zealand

Gini Coefficient 0.46
Change in Gini 21.1
Inequalities in emissions 5.6
Poverty Gap
Electricity Access 100

Nigeria

Gini Coefficient 0.55
Change in Gini -9.8
Inequalities in emissions 4
Poverty Gap 30.5
Electricity Access 55.4

Norway

Gini Coefficient 0.39
Change in Gini -7.1
Inequalities in emissions 5.5
Poverty Gap 0.2
Electricity Access 100

Philippines

Gini Coefficient 0.57
Change in Gini -6.6
Inequalities in emissions 8
Poverty Gap 3.9
Electricity Access 95.6

Poland

Gini Coefficient 0.48
Change in Gini 0
Inequalities in emissions 5.4
Poverty Gap 0.2
Energy Access 19.5

Republic of Korea

Gini Coefficient 0.55
Change in Gini 0
Inequalities in emissions 7.9
Poverty Gap 0.1
Electricity Access 100

Russia

Gini Coefficient 0.55
Change in Gini -11.3
Inequalities in emissions 6
Poverty Gap 0.1
Electricity Access 100

Saudi Arabia

Gini Coefficient 0.65
Change in Gini -3
Inequalities in emissions 6.5
Poverty Gap
Electricity Access 100

South Africa

Gini Coefficient 0.76
Change in Gini 8.6
Inequalities in emissions 10.3
Poverty Gap 15.1
Electricity Access 85

Spain

Gini Coefficient 0.45
Change in Gini -2.2
Inequalities in emissions 4.2
Poverty Gap 0.8
Energy Access 13

Sweden

Gini Coefficient 0.41
Change in Gini 0
Inequalities in emissions 5.6
Poverty Gap 0.7
Energy Access 24.3

The Netherlands

Gini Coefficient 0.41
Change in Gini 2.5
Inequalities in emissions 4
Poverty Gap 0.1
Energy Access 4.4

Turkey

Gini Coefficient 0.64
Change in Gini 8.5
Inequalities in emissions 7.7
Poverty Gap 0.5
Electricity Access 100

Ukraine

Gini Coefficient 0.43
Change in Gini -2.3
Inequalities in emissions 4.3
Poverty Gap 0
Electricity Access 100

United Kingdom

Gini Coefficient 0.47
Change in Gini -4.1
Inequalities in emissions 4.7
Poverty Gap 0.3
Energy Access 9.2

United States

Gini Coefficient 0.58
Change in Gini 1.8
Inequalities in emissions 7.5
Poverty Gap 1
Electricity Access 100

Vietnam

Gini Coefficient 0.57
Change in Gini -1.7
Inequalities in emissions 7
Poverty Gap 1.8
Electricity Access 99.4



How do energy policy categories impact inequality and poverty?

The inequality and poverty analysis groups the policies listed in the Energy Policy Tracker into 32 energy policy categories and provides a summary assessment of their likely inequality and poverty impacts based on existing literature and a conceptual framework. The assessment also provides an overview of the number of energy policies listed in the Energy Policy Tracker database that fall within each policy category and the types of contextual elements, design elements and complementary policies which can influence the direction and magnitude of the inequality and poverty.

Policy Category Classification on EPT Dimensions of Social Outcome Contextual Factors, Indicators and Policy Response Number of Matching Policies
Incidence Policy category Clean/Fossil/Other Energy  Inequality  Poverty Indicators influencing the direction or magnitude of effects Complementary policies which influence the direction or magnitude of effects
Consumer Government support for public transport (cheaper fares for users) Clean Inequality unclear (high confidence)

Partially or fully subsidized transfer fees are expected to decrease inequality because lower-income riders will capture more benefits than higher-income riders.
Distance- or time-based fare pricing can increase or decrease inequality depending on ridership demographics and transit patterns.
Subsidizing all fares at the same rate (flat fares) may increase inequality if higher-income riders end up benefiting from the subsidy as much as lower-income ones. However, this will depend on the demand elasticity (e.g., even with cheaper rates, wealthier groups may choose not to use public transport).

Poverty decreasing (high confidence)

Because low-income riders are more dependent on public transit than higher-income riders, who tend to be more likely to own private vehicles or are able to make lifestyle changes such as working from home, lowering the price of public transit will decrease a non-substitutable expense for low-income households

Pricing mechanism

Ridership demographics

Size and density of metropolitan area

Ridership patterns

Targeted transfers for low-income riders

Free transfers

Greater accessibility in rural areas

Population-specific accessibility improvements

More efficient transit systems

6
Supply and Infrastructure Government support for public transport companies and provision of public transport infrastructure Clean Inequality unclear (medium confidence)

Providing public transport infrastructure reduces inequality, at least locally, by providing options for lower-income individuals to reach work, hospitals, and other essential services; such options tend to be used less by higher-income individuals. Many jobs in the public transportation sector target lower-income and middle-class households, thereby decreasing inequality further.
On the other hand, there are mixed findings on whether public transport provision, especially railway infrastructure, is more likely to alleviate or exacerbate existing special inequalities between more and less economically developed areas.

Poverty decreasing (high confidence)

Improving access to public transport, especially in low-income neighbourhoods or regions, provides opportunities for individuals in these communities to potentially access vital resources and expand employment opportunities, including directly in the transportation sector. This is likely to decrease poverty, through health effects, income effects, and spatial effects, while also likely leading to medium-term decreases in local pollution.

Size of programs

Reach of infrastructure

Makeup of public transport users

Location of key resources (hospitals, jobs, government services)

Including conditionalities of pricing support for low-income groups, subsidized fares, and job retention 141
Consumer Government support for EV and hydrogen vehicle purchases, and use of EV charging Clean Inequality increasing (high confidence)
Because the policies function by reducing the price of products that still require a large upfront investment, or home ownership in the case of charging installation incentives, they are more widely used by higher-income groups, thus increasing the gap between higher- and lower-income households.
Neutral (high confidence)
The policies decrease the price of a household good, which should decrease poverty. However, the large upfront costs linked to EV purchases are likely to create a barrier that prevents the low-income households from capturing clear benefits from such support.
Availability of charging infrastructure nearby

Homeownership/housing type of consumers

Urban vs. rural population (different regulatory incentives will apply)

Income cap for rebates

Income-tiered rebates

Increase education and consumer awareness in low-adoption areas

Install public charging infrastructure in areas with low home ownership rates or predominance of multi-unit dwellings

57
Infrastructure Government support for EV charging infrastructure, grid integration of EVs, and hydrogen charging stations Clean Inequality increasing (low confidence)

Government support for EV charging infrastructure is likely to increase inequality, as the infrastructure may initially serve only higher-income groups. This type of policies can also create employment, but jobs are likely to involve both low- and high-skilled workers without necessarily having an impact on inequality.

Poverty decreasing (low confidence)
Government support for EV charging infrastructure can decrease poverty both through employment effects and health effects, but this is largely dependent on the local environment.
Skills level of EV infrastructure employees

Comprehensiveness of EV charging plans and growth of industry

Support for alternative transport options for low-income communities

Location of EV infrastructure and general effect on local community

Training of low-income workers in the EV sector

Pathways to employment for former employees in the conventional car industry

Long-term strategy for EV support

55
Consumer Government support for purchase of conventional cars Fossil Inequality decreasing (low confidence)

Price support for internal combustion engine (ICE) vehicles’ purchase is likely to benefit households across income distribution, with higher-income consumers potentially benefiting more due to their higher ability to purchase a new vehicle. However, they may also be the ones most able to deal with price increases of ICE vehicles or otherwise to transition to more expensive EVs in the absence of such support. This may change over time when price parity between ICE vehicles and EVs is reached.

Poverty decreasing (medium confidence)

Increasing or preserving the competitiveness of buying ICE vehicles is expected to avoid job losses that can increase poverty, as well as facilitate workers’ ability to access their job places.

Car ownership rates among lower-income households

Availability of alternative transportation options

Make up of job type and location in ICE manufacturing sectors

Lower the cost to purchase and use of EV vehicles to accommodate the purchasing power of lower-income households.

Assist in job programs to help transition workers from ICE to EV where possible or into another sector and job where necessary

33
Consumer Government support for transport fuels Fossil Inequality unclear (medium confidence)
Fuel price increases (decreases) resulting from these types of policies are likely to increase (decrease) inequality, as lower-income households tend to spend a larger portion of their incomes on transport fuels or are proportionally more effected by price increases (decreases) in price changes of goods such as food products, in turn related to fuel prices. However, these effects may be at least partly reversed if car ownership rates in a country are particularly low.
The identified impacts are expected to be amplified in rural areas as opposed to urban areas due to the higher availability of alternative forms of transportation in the latter.
Poverty decreasing (medium confidence)

Increasing or preserving the competitiveness of buying ICE vehicles is expected to avoid job losses that can increase poverty, as well as facilitate workers’ ability to access their job places.

Car ownership rates among lower-income households

Availability of alternative transportation options

Make up of job type and location in ICE manufacturing sectors

Lower the cost to purchase and use of EV vehicles to accommodate the purchasing power of lower-income households.

Assist in job programs to help transition workers from ICE to EV where possible or into another sector and job where necessary

10
Supply Ban on sales of conventional cars Fossil Inequality increasing (high confidence)
Bans on conventional cars are expected to disproportionately hurt rural and middle- to low-income communities that rely on low-cost ICE vehicles for work or commuting and cannot afford the price of EVs or do not have access to public transport. High-income individuals can purchase non-conventional cars or move to locations more convenient for public transit, thus being mostly unaffected by the ban.
However, these bans tend to be applicable only in the medium term, with a usual lag of a few years from their announcement; this may provide opportunities to make alternative transport options both more available and more affordable, this way partly or fully mitigating negative social impacts
Poverty increasing (medium-high confidence)

Not only are bans on low-cost ICE vehicles expected to hurt rural and middle- to low-income consumers, but they may also lead to unemployment for low-income workers employed in the gas industry, at gas stations, or as mechanics.
However, these bans tend to be applicable only in the medium term, with a usual lag of a few years from their announcement; this may provide opportunities for alternative employment options and retraining to occur, this way partly or fully mitigating negative social impacts.

Income-level makeup of car owners in the country

Skill level of employees in the conventional car industry

Length of preparation time before ban

Progressive implementation of the policy

Funding for skills training programs to assist in the transition to non-conventional vehicles

Financial mechanisms decreasing prices of alternatives to conventional cars

Investment in infrastructure for public transit and EVs

2
Supply Bailouts of car companies and other forms of government support to the car industry Fossil Inequality neutral (low confidence)
Support for car companies (including through bailouts) benefits both low-wage employees and high-wage executives of car companies relatively equally, assuming that the benefits of this support are passed on to workers.
Poverty decreasing (medium confidence)

Car companies employ many unskilled workers, often in rural areas with few other employment opportunities. Bailouts and other forms of government support to car companies ensure continued income for these workers

Economic size of the car industry

Country reliance on cars

Locations of vehicle manufacturers

Technologies used to minimize work-related health risks and local pollution

Degree of automation used in car production plants

Government support conditional on an obligation for the industry to include cleaner car manufacturing activities (minimizing local pollution)

Government support conditional on the industry’s investment in electric vehicles

Government support conditional on continued employment and benefits for low-skilled or low-wage employees

40
Consumer and infrastructure Government support for bicycles and cycling infrastructure or walking paths Clean Inequality neutral (medium confidence)
While regular bike purchases seem to favour higher-income citizens, bike-sharing services in cities appear to be most strongly used by lower-income households. However, rural citizens often do not have access to bike-sharing platforms.
Patterns of use of walking paths strongly depend on location.
Poverty decreasing (high confidence)
Incentives to purchase or use bicycles will always have a poverty-decreasing effect by making it easier for lower-income groups to access services, even if the scale of that effect might be relatively limited.
Size of programs

Location of programs (urban/rural; within urban bike-sharing programs)

Makeup of bike and bike share mobility users

Spatial analysis to improve supply to lower-income areas; specific support for lower-budget bikes used by lower-income citizens 59
Infrastructure Government support for road building and repair, airport and port infrastructure Fossil Inequality decreasing (low confidence)

In countries with limited infrastructure, increasing access to markets through road building can reduce the gap between high- and low-income populations. However, support for airport and port building has no positive effect on inequality, hence the low confidence of the inequality-decreasing assessment.

Poverty decreasing (medium confidence)

Infrastructural support allows communities to engage with the market, sell their goods, benefit from tourism, and travel for work. It brings an economy together and thus can help lift communities out of poverty. On the other side, large infrastructure projects often entail risks of increasing localized pollution and erosion of biodiversity.
Reliable internationally oriented infrastructure, such as ports and airports, support foreign investments and growth that ultimately may help decrease poverty if it is not exclusively rent-seeking.

Local environmental impacts of infrastructure support

Repairs or new infrastructure

Extent of rural poverty and inclusion in economies

Role of tourism in the economy

Role of migrant work

Extent of export or import reliance

Hiring of unemployed or marginalized workers to undertake infrastructure projects

Inclusion of local communities in decisions to implement projects

Use of sophisticated technologies to minimize emissions or local pollution

68
Supply Bailouts of airlines or airports and other forms of government support to the airline industry Fossil Inequality increasing (medium confidence)
Bailing out or supporting airlines or airports ultimately benefits airline executives and middle- and upper-class passengers. Though it may lead to maintaining or increasing employment, this is not enough to decrease inequality in any significant manner.
Poverty decreasing (low confidence)
Such support can help maintain or create low-skilled employment in airports. Moreover, in areas relying on tourism, bailing out or supporting airports can ensure continued employment for low-income workers despite economic shocks.
Economy’s reliance on tourism
Size of airport and airline
Conditional hiring or job protection plans

Support for affiliated industries

Development of policies to diversify the economy in tourism-reliant areas

81
Supply Bailouts of shipping companies and other forms of government support for the shipping industry Fossil Inequality unclear (medium confidence)
Bailing out or otherwise supporting shipping industries does not particularly impact inequality domestically, but it can potentially reduce global inequalities by providing income streams for otherwise employment-seeking migrant workers.
Poverty decreasing (medium confidence)
Bailing out or otherwise supporting shipping industries ensures the continued employment of millions of workers and continued income for workers in commodities and other export-oriented industries. They also can ensure continued access to low-cost imported goods for low-income segments of the population that may rely on these goods.
Size of bailout

Efficiency of shipping countries before and after bailout

Extent of nationalization

Domestic or international focus of shipping companies

Workers’ rights protections affiliated with bailouts

Continuation of previously existing shipping routes

3

 

Policy Category Classification on EPT Dimensions of Social Outcome Contextual Factors, Indicators and Policy Response Number of Matching Policies
Incidence Policy category Clean/Fossil/Other Energy  Inequality  Poverty Indicators influencing the direction or magnitude of effects Complementary policies which influence the direction or magnitude of effects
Consumer Changes in electricity tariffs for households and related regulatory changes Other energy Inequality unclear (high confidence)

As low-income households spend a larger portion of income on electricity, electricity tariff increases can either increase or decrease inequality, depending on the specific income distribution in a country.

A decrease in electricity tariffs is likely to have a limited increasing effect on inequality, as high-income households disproportionately benefit from electricity subsidies, especially in urban areas.

 

 

Poverty increasing or decreasing depending on the direction of the price mechanism (medium confidence)

Increased electricity tariffs increase poverty in the short term due to inelastic demand, as there are few substitutes for electricity.

Lower electricity tariffs tend to decrease poverty, though only marginally in areas where electricity makes up a smaller portion of household expenditure.

National income distribution

Volatility of electricity prices

Proportion of household income spent on electricity by different households

Government spending on social welfare as opposed to electricity subsidies

Targeting of subsidies for the lower-income groups (e.g., income cap for subsidies)

Progressive taxation of other forms of household energy consumption not included in electricity tariffs

Direct cash transfers to households instead of energy subsidies

18
Consumer Changes in gas tariffs for households and related regulatory changes Fossil Inequality unclear (high confidence)

Poor households spend a larger portion of income on energy than higher-income ones, so gas price increases tend to increase inequality where gas is used. However, richer households spend larger amounts on energy, which may reverse this effect.

A decrease in gas price is likely to have a limited increasing effect on inequality, as high-income households disproportionately benefit from gas subsidies. In low- and middle-income countries, many low-income (especially rural) consumers do not use gas, hence gas subsidies become a transfer to higher-income groups, increasing inequality

Poverty increasing or decreasing depending on the direction of the price impact and gas consumption patterns (medium confidence)

Lower gas prices decrease poverty where gas is used by low-income households, though only marginally in areas where gas makes up a small portion of household expenditures.

Higher gas prices are likely to increase poverty. In low- and middle-income countries, it can lead to fuel switching to kerosene or biomass, causing additional health impacts.

National income distribution

Volatility of gas prices

Gas consumption patterns

Proportion of income spent on gas by different households

Government spending on social welfare

Targeting of subsidies for the lower-income groups (e.g., income cap for subsidies)More progressive general taxation

Compensation mechanisms in place (e.g., through direct cash transfers to lower-income households)

Support for households to transition to clean energy sources and technologies
Support for households to improve household energy efficiency

4
Consumer Changes in energy tariffs (electricity and gas) for businesses and related regulatory changes other energy / fossil Inequality unclear (medium confidence)

Policies lowering the price of energy can reduce inequality if firms choose to pass on savings to workers and consumers or increase inequality if the savings are captured by shareholders.

Policies raising the price of energy can reduce inequality if firms absorb the price difference by reducing profits or increase inequality if firms pass on the cost to consumers, reduce wages, or lay off workers.

Poverty neutral or increasing depending on the direction of the price mechanism (low confidence)

Policies lowering the price of energy for businesses is likely to be poverty neutral: because of price stickiness, firms are unlikely to pass on savings to consumers.

Policies that raise the price of electricity or gas can increase poverty if the increased cost is translated into lower wages or higher consumer prices.

Size of firms

Energy intensity of business

Type of industry

Target consumers of the firms’ products

Ability for firms to substitute factors of production

Credit and financing for firms to improve energy efficiency

Stipulations to share energy savings with labourers and consumers

Direct cash transfers for small enterprises

14
Consumer Government for the purchase of renewable energy installation for households and related regulatory changes Clean Inequality increasing (High confidence)
In fully electrified high-income countries, residential renewable energy installations mostly benefit higher-income households. Inequality decreasing (medium confidence)
In lower- or middle-income countries where measures are targeted at non-electrified, rural areas, this access can decrease inequality.
Poverty increasing (medium confidence)
In fully electrified high-income countries, residential renewable energy installations can increase the electricity tariffs paid by lower-income consumers. Poverty decreasing (medium confidence)
In middle- or lower-income countries where measures are targeted at non-electrified, rural areas, such policies can decrease poverty by lowering access costs (i.e., other generation options) and providing economic opportunities.
Level of electrification and whether the objective is to improve electricity access or reduce grid utilization

Housing type of consumers and potential to install renewable energy systems

Share of urban vs rural population

Ability to link electricity access policies with other developmental objectives

Progressivity of electricity tariff structure

Loan programs for lower-income households or improved access to support policies

24
Consumer Government support for the purchase of renewable energy installation for businesses and related regulatory changes Clean Inequality increasing (low confidence)

Benefits are likely to be disproportionately captured by the higher-income business owners, while grid costs induced by higher renewable energy penetration are likely to be carried by all consumers. The magnitude of impact will be influenced by the firm’s choice to save or pass on decreases in energy cost.

Poverty unclear (medium confidence)

Such policies can be poverty increasing when renewable energy installations from businesses increase the tariffs paid by other consumers.

Such policies can be poverty decreasing in low- or middle-income countries, where measures are targeted at low-electrified, rural areas, by lowering access costs (i.e., other generation options) and providing economic opportunities.

Level of electrification and whether the objective is to improve electricity access or reduce grid utilization

Building types, location of businesses, and potential to install renewable energy systems

Share of urban vs rural population

Ability to link electricity access policies with other developmental objectives

Progressivity of tariff structure

Loan programs for lower-income businesses (targeting)

20
Supply Government support for fossil-based energy generation Fossil Inequality neutral (medium confidence)

The job and price effects of such policies are likely to have little impact on inequality. Both lower- and higher-skilled jobs can be created as a result of the policy, while price effects are uncertain.

Poverty neutral (low confidence)

If price effects are observed, the most likely impact is a decrease in poverty through a decrease in the price of energy. This effect is, however, very uncertain. Such support can lead to job creation if additional capacity is installed, although to a lesser extent than renewable energy generation

Structure of workforce in the fossil fuel power sector (low- vs high-skilled workers)

Share of household’s revenue dedicated to energy consumption

26
Supply Government support for renewable energy generation Clean Inequality increasing (medium confidence)

Increased budgetary transfers that incentivize new renewables can result in higher costs for utilities that are passed on to consumers and disproportionately affect low-income households. These impacts can be offset in the medium term by the stabilization or decrease in energy prices from renewable energy generation.

Poverty unclear (medium confidence)

While there are many jobs associated with renewable energy generation, increased budgetary transfers that incentivize new renewables can result in higher electricity prices that disproportionately affect low-income consumers. The negative price effect should diminish in the medium term as the cost of renewable energy generation decreases.

Employment structure of the renewable energy sector

Share of households’ income dedicated to energy consumption

Location where renewables are installed

Share of renewables in the energy mix

Electricity tariff structure

Policies targeted at poorer households that can mitigate potential tariff increases 127
Supply Government support for large hydropower generation Clean Inequality increasing (medium confidence)
Increased budgetary transfers that incentivize new large hydro construction will likely result in the displacement and negative impacts on the livelihoods of local and vulnerable populations.
Poverty increasing (medium confidence)
While there are jobs associated with hydropower generation, increased budgetary transfers that incentivize new, large hydropower construction will likely result in the displacement and negative impacts on the livelihoods of local populations.
Location of installations, presence and size of affected populations, and the source of their livelihoods

Share of hydropower in the energy mix

Policies mitigating impacts on populations living nearby hydroelectric basins (consultation, compensation) 7
Supply Government support for nuclear energy generation Other energy Inequality neutral (medium confidence)

The inequality impact of job creation is likely to be limited, as both lower- and higher-skilled jobs may be created. The direction of the price effect is likely to be limited and depends on the structure of the energy system and type of infrastructure incentivized (new/old).

 

Poverty unclear (low confidence)

While such support can be associated with job creation, the direction of the price effect is unclear and depends on the structure of the energy system and type of infrastructure incentivized (new/old).

 

 

 

Location of installation

Share of nuclear power in the energy mix

Type of reactors incentivized

Policies targeted at poorer populations that can mitigate potential tariff increases 9
Infrastructure Government support for electricity T&D and off-grid electrification Other energy/clean Inequality unclear (medium confidence)

T&D support needs to be considered on a case-by-case basis. Targeting capital expenditure to improve electricity supply for the poor can improve electricity access and therefore reduce inequality. But T&D subsidies for other purposes need to be assessed on their merits.

By targeting rural communities, off-grid solutions can contribute to decrease inequalities.

 

Poverty decreasing (high confidence)

Improving electricity supply has an alleviating effect on poverty, as it addresses many aspects of poverty, from health to income to education and living standards. Many studies support the positive benefits of electrification programs, especially when they are catered to specific remote or low-income communities. Grid integration of renewables may have a further poverty alleviation effect by creating jobs and reducing environmental pollution.

 

 

Reliability of electric grids

Targeting of transfers to support networks to rural or low-income areas

Price of renewable energy

Demographics of populations accessing electric grid

Targeting of transfers to support networks in rural or low-income areas

Inclusion of multiple energy sources to combat outages

Increasing grid connectivity to improve stability and the entry of renewables, therefore reducing social costs from fossil fuel generation

Employment programs for low-income communities in electric grid upgrades

Inclusion of marginalized communities in energy decisions

Inclusion of local and Indigenous communities in the design of off-grid programs

68

 

Policy Category Classification on EPT Dimensions of Social Outcome Contextual factors, indicators and policy response Number of Matching Policies
Incidence Policy category Clean/Fossil/Other Energy  Inequality Poverty Indicators influencing the direction or magnitude of effects Complementary policies which influence the direction or magnitude of effects
Consumer Government support for energy-efficiency, retrofitting, or renewable heating programs in private housing and energy efficiency or heating standards or regulations Clean Inequality increasing (high confidence)

Policies for private homeowners are likely to be more accessible to higher-income households, while low-income homeowners and non-homeowners may experience time or communication barriers to access these programs. Over time, inequality increases with the costs of energy.

Poverty decreasing (medium confidence)

There is likely to be a slight decreasing impact on poverty, as this policy generates additional green jobs in retrofitting homes and for regular maintenance of infrastructure, assuming these jobs are available to lower-income workers.

Distribution of homeowners per income decile

Income level of households accessing subsidies for energy-efficiency retrofits

Sustainability of job creation as a result of increased demand for private home retrofit projects

Incentives for landlords to make use of energy-efficiency subsidies

Changes in energy costs over time, both affiliated and unaffiliated to the effects of the energy-efficiency programs

Subsidies linked to results in a higher level of subsidies for buildings that save more energy over time

The general taxation system needs to be progressive with a fairer distribution of tax revenues

Community reach-out programs for low-income homeowners to bridge the information gap

Training programs for lower-income workers to learn how to conduct retrofits and apply those skills in the regions in which these programs are occurring

Safeguards so tenants do not experience cost increases once energy-efficiency measures are implemented

67
Consumer Government support for energy-efficiency, retrofitting or renewable heating programs in social housing Clean Inequality decreasing (high confidence)

As low-income households are more likely to live in social housing, this policy would decrease the energy prices paid by these populations and reduce their poverty levels, while energy prices remain the same for higher-income populations.

Poverty decreasing (high confidence)

Alongside creation of jobs for lower-income workers, lowering the cost of energy for those living in social housing would reduce energy poverty for the most marginalized populations. Improving the reliability and efficiency of the energy system would likely also have positive health benefits, which further reduces poverty.

Income level/energy poverty level of population living in social housing

Stringency of rent control policies

Energy performance of the social housing stock

Changes in energy prices over time, both affiliated and unaffiliated to the effects of the energy-efficiency programs

Subsidies linked to energy performance

Link benefits to the condition that landlords do not pass a majority of the costs of renovation on to renters

Ensure secondary living options while retrofitting is occurring

Develop training programs for the low-income workers to learn how to conduct retrofits and apply those skills in the regions in which these programs are occurring

Encourage design of retrofits to meet the specific needs of renters (those with health issues, disabilities, etc.)

20
Supply Government support for energy efficiency, retrofitting or renewable heating programs in public and commercial buildings Clean Inequality neutral (medium confidence)

Improvement in energy efficiency in public and commercial buildings and lower costs for businesses are unlikely to affect inequality in any substantial way. If profits increase, their distribution between high-wage and low-wage workers is unlikely to change.

Poverty decreasing (low confidence)

Growth in employment opportunities for low-income workers, as well as potentially healthier and safer workplaces for those working in public and commercial buildings/factories/warehouses can decrease poverty slightly.

Tendency for businesses to pass profits on to workers or consumers through wages or penalize them when not receiving incentives

Proportion of the population working in unsafe/under-heated/under-cooled environments

Government fiscal decisions around the use of macro savings on social programs for the poorest segments of the population

Subsidies linked to energy performance

Provide financing mechanisms that reduce up-front risk and cost of retrofitting for public buildings

Develop training programs for the most marginalized segment of workers to learn how to conduct retrofits and apply those skills in the regions in which these programs are occurring

Encourage design of retrofits in commercial buildings that employ many low-income workers to be catered to the health of workers

63
Supply Government support to the buildings sector without climate strings attached Fossil Inequality neutral (low confidence)

Lower costs for businesses are unlikely to affect inequality in any substantial way. However, over time, inequality can increase as low-income households become less resilient to fossil fuel price increases and to climate shocks.

 

 

 

Poverty unclear (medium confidence)

While support to the buildings sector may generate employment, this will not be as significant as for retrofits or mandated standards. Without climate strings attached, such support may also increase emissions with detrimental impacts on the health of lower-income households.

 

Tendency for businesses to pass profits on to workers or consumers through wages

Government fiscal decisions around the use of macro savings on social programs for lower-income groups

Evolution of energy prices over time

Change in the energy performance of the building stock over time

Attach climate and social conditionalities to government support 3

 

Policy Category Classification on EPT Dimensions of Social Outcome Contextual factors, indicators and policy response Number of Matching Policies
Incidence Policy category Clean/Fossil/Other Energy  Inequality  Poverty Indicators influencing the direction or magnitude of effects Complementary policies which influence the direction or magnitude of effects
Supply  Government support for resource exploration, domestic resource production, and extraction Fossil Inequality increasing (medium confidence)

Such support is likely to disproportionately benefit the executives of extractive industries. Adverse social costs tend to disproportionately impact local and poor communities.

Poverty unclear (medium confidence)

Such support can lead to job creation for the low-income, low-skilled workforce. This impact tends to be, however, spatially uneven and unsustainable over time. Adverse social costs tend to disproportionately impact local and poor communities.

Makeup of extractive industry workforce (skilled vs unskilled)

Migratory nature of resource extraction work

Location of resource extraction sites in relation to local/Indigenous communities

Nature of resource extraction activities (type of fuel, short term or long term)

 

Government support of skills upgrading and value chain investment

Tying of increased profits in resource extraction to increased wages for workers and social programs in local communities

Ensuring that taxation of fossil fuels reflects social costs associated with their production and consumption, and that collected revenues are directed to mitigating these costs

Engagement with local/Indigenous communities and provision of the necessary informational and legal support to ensure more just negotiations

 

124
Consumption Government support for energy efficiency and renewable energy installations for resource extraction industries Fossil Inequality unclear (low confidence)

Such support is likely to create disproportional benefits for executives of extractive industries. However, as the social cost of fossil fuel extraction decreases, less significant losses may be experienced in local communities. This effect would, however, be marginal if fossil fuel extraction increases as a result of the support.

Poverty decreasing (low confidence)

This type of support can lead to increased job creation for the low-income, low-skilled workforce, with better employment and job quality prospects. It may also decrease the social and environmental costs of extraction at the local level.

 

Makeup of extractive industry and renewable energy installation workforce (skilled vs unskilled)

Migratory nature of resource extraction work

Location of resource extraction sites in relation to local/Indigenous communities

Government support of skills upgrading and value chain investment in both the resource extraction industry and the renewable energy installation industry

Tie increased profits in resource extraction to increased wages for workers and social programs in local communities

Ensure that taxation of fossil fuels reflects social costs associated with their production and consumption, and that collected revenues are directed to mitigating these costs

8
Supply Government support for enhanced private sector participation in resource production Fossil Unclear effect on inequality (medium confidence)

Increased private sector participation is more likely to increase inequality on an economy-wide scale in low-income countries than in higher-income countries, where in the latter institutions, regulations, and complementary policies are more likely to be in place to alleviate potential detrimental impacts.

On a local scale, there is a risk of increased inequality due to an increase in job losses, and for those still employed, the wage gap tends to be higher for private companies than state-owned enterprises.

Unclear effect on poverty (medium confidence)

Private actors may be less accountable than state actors for the negative environmental externalities linked to resource production with potentially detrimental social and environmental impacts at the local level.

There is also a risk of increased poverty due to an increase in job losses, particularly when private companies are solely focused on increasing cost efficiency. Conversely, there is also potential for a decrease in poverty for workers still employed, as private companies tend to pay better than state-run ones.

Excessive privatization and deregulation can lead to a shifting of profits from lower-income countries to (mostly foreign) private investors

GDP, low-income vs. higher-income economy context

Gini coefficients, poverty gaps, and other key poverty and inequality indicators

Un/employment rates, local and economy wide

Existence of appropriate government institutions, rule of law, regulations, and complementary policies

Design of more equitable contracts to more equally benefit government, foreign private actors, and society

Gradual pace of reforms

Extent of private sector participation (partial involvement to full privatization)

Local content requirements that require the inclusion of local employment, equipment, and/or services

Just transition plans in place to ensure continued social protection of displaced workers during privatization

82
Supply Changes to government support for orphan and inactive well clean-up, coal mine rehabilitation, and disposal of offshore platforms Fossil Inequality neutral (medium confidence)

Such support is likely to create limited benefits for the executives of extractive industries. Increased employment opportunities and reduced environmental damage are likely to benefit low-income workers and the local and poor communities, balancing out these effects.

Poverty decreasing (medium confidence)

Such support can lead to increased job creation for the low-income, low-skilled workforce and support the local economy as it transitions away from fossil fuels. In areas with high environmental damage, long-term decreases in health costs can lower poverty.

Makeup of extractive industry workforce and remediation/clean-up jobs (Skilled vs unskilled)

Migratory nature of resource extraction work

Location of resource extraction sites in relation to local communities

Government support for sustainable and economically rigorous use of land after clean-up

Ensure hiring of locally displaced workers from closing of mine or well in the clean-up activities

Development of economic just transition and diversification plans with relevant stakeholders

4
Infrastructure Government support for resource storage, transportation, or infrastructure Fossil Inequality increasing (medium confidence)

Such support is likely to increase inequalities, as increased fossil fuel production may lead to disproportionate benefits for the executives of extractive industries and increased social costs for local and Indigenous communities. Job creation opportunities in sectors requiring a low-skilled workforce (e.g., construction) may limit this effect.

Poverty unclear (medium confidence)

Such support is likely to increase job creation for the low-income, low-skilled workforce in the fossil fuel industry. Infrastructure investments can create additional, more sustainable employment and economic opportunities, but can also lead to further disruptions of local and Indigenous communities’ livelihoods.

Structure of the local economic system (existence of local industries that would benefit from roads and infrastructure)

Makeup of the extractive industry workforce (skilled vs unskilled)

Location of resource exploration and extraction sites in relation to local communities

Government support of skills upgrading and value chain investment

Tie increased profits in resource extraction to increased wages for workers and social programs in local communities

Government protection of local communities where exploring, transportation, or storage is occurring, and plans to protect or support these

 

9

 

Policy Category Classification on EPT Dimensions of Social Outcome Contextual factors, indicators and policy response Number of Matching Policies
Incidence Policy category Clean/Fossil/Other Energy  Inequality  Poverty Indicators influencing the direction or magnitude of effects Complementary policies which influence the direction or magnitude of effects
Consumer and supply Strengthening of emissions-trading and carbon-pricing schemes (increased price, extension to new sectors) Fossil Inequality unclear (medium confidence)

In low-income countries, carbon pricing has more of an inequality-reducing impact, as high-income groups have a higher share of energy expenditure but the opposite holds true in high-income countries. The underlying distribution of income can also affect the impact carbon pricing will have on income inequality.

 

Poverty decreasing (high confidence)

Alongside creation of jobs for lower-income workers, lowering the cost of energy for those living in social housing would reduce poverty for the most marginalized populations, and the improvement of energy system reliability and efficiency would likely have positive health benefits, which compound to further reduce causes of poverty.

Gini coefficients

Poverty gaps

Other key poverty and inequality indicators

Household annual income and consumption expenditure per income group

Carbon tax/emissions trade schemes rate, coverage, and existing industry exemptions

 

Environmental tax reform and reduction in income taxes for labour

Targeted and untargeted cash transfers

Revenue recycling with other tax cuts (corporate, sales, or manufacturing taxes)

Full or partial earmarking of revenues for renewable energy subsidies, retraining of fossil fuel workers or investments in low-carbon projects

 

5