(CNN) The energy crisis sparked by Russia’s war in Ukraine could plunge 141 million people worldwide into extreme poverty, according to a new report published Thursday in the journal Nature Energy.
Researchers from the Netherlands, the United Kingdom, China and the United States modeled the impact of increased energy prices in 116 countries and found that household spending has risen by up to 4.8% on average as coal and natural gas prices fall after the Russian invasion of Ukraine have skyrocketed, they added to post-pandemic spikes.
In low-income countries, the report says, poorer households, already facing severe food shortages, are at greater risk of poverty because of higher energy bills. Households in higher-income countries also felt the impact of rising energy prices but were more able to absorb them in their household budgets, the report found.
And some countries are more at risk than others – for example, energy cost increases in Estonia, Poland and the Czech Republic are above the global average, mainly because these countries are more reliant on energy-intensive industries. In particular, Poland relied on coal for 68.5% of its energy production as of 2020.
Increases in energy prices caused by the crisis in Ukraine have also led to higher costs for basic necessities such as food. Compared to last year in the US, eggs increased 70.1%, margarine 44.7%, butter 26.3%, flour 20.4%, bread 14.9%, sugar 13.5%, Milk up 11%, chicken up 10.5% and fruit and vegetable prices combined rose 7.2%, according to inflation data released this month by the Bureau of Labor Statistics.
And consumer goods companies say prices won’t fall any time soon.
On Thursday, the CEO of Nestlé, the world’s largest food company, echoed other consumer giants like Unilever and Proctor & Gamble to warn that prices for staple foods will continue to rise this year.
“Like all consumers around the world, we have been hit by inflation and are now trying to repair the damage done,” Nestlé CEO Mark Schneider said in a phone call with reporters on Thursday, but declined to say the The company’s 2,000 brands, which include frozen foods, confectionery and baby food, would be affected by price increases.
On a call last week, Unilever’s chief financial officer, Graeme Pitkethly, told reporters, “We’re probably past the peak of inflation, but we’re not yet at peak prices.” Unilever’s CEO said on the same conference call that the company expects food prices to increase significantly in 2023.
According to the report, many governments around the world have already taken steps to mitigate the impact of rising energy prices on households, from reducing energy taxes and providing rebates on energy bills to one-off energy subsidies and price caps.
But the report suggests more could be done, such as These include setting price subsidies, levying windfall taxes on energy companies, and passing legislation to use more sustainable energy sources along food supply chains.
The report adds that this energy crisis should serve as a reminder of the risks of “an energy system that is heavily dependent on fossil fuels.” Not only is it pushing millions to the brink of extreme poverty, but it is also accelerating climate change, which poses greater challenges to those most vulnerable to rising energy prices.
CNN’s Hanna Ziady contributed to the coverage.