While this report is largely an analysis of what policy principles improve the environment, an important undertone throughout the report is that economic freedom improves the human condition. Moreover, access to affordable, reliable energy is fundamental to bettering human lives. Dependable power heats homes for families and powers schools, hospitals, farms, and the industrial processes that make the products consumers rely on every day. Energy significantly enhances productivity by doing work for humans so they can be productive elsewhere. Moving from manual labor to mechanized equipment saves time, effort, and money. 

Energy allows people to commute to work and thereby enables people to live in more affordable areas. Energy empowers people to travel the world and see things our ancestors could only read about. It keeps people safe in innumerable ways, from powering modern defense systems to lighting streets to reduce criminal activity.¹ In short, energy is paramount to our way of life. 

And yet, while many people take energy access for granted, it is a luxury or simply unavailable for far too many people. More energy is necessary to lift people out of poverty and improve living standards around the world. Encouragingly, the number of people without access to electricity has declined, from 1.3 billion people in 2012 to 774 million in 2022. However, energy poverty in emerging and developed countries remains unacceptably high. In fact, 2.3 billion people in 128 countries rely on open fires or cookstoves that use wood, charcoal, agricultural waste, and animal dung for fuel.² Alleviating economic and energy poverty (inadequate supplies at unaffordable costs) will be particularly challenging in parts of Africa, where poverty is highest, and populations are set to grow. More than 600 million people in Africa do not have access to electricity and the population on the continent may nearly double to 2.5 billion people by 2050. ³

Policymakers set on improving environmental conditions and reducing climate risks cannot dismiss the priority of reducing poverty and improving economic well-being. The two goals do not need to be mutually exclusive, but in some instances they may be. The tradeoff of rising emissions from the use of conventional sources is greater energy access and better living conditions. Providing families with electric or propane cookstoves may increase greenhouse gas emissions but significantly reduce indoor air pollution that prematurely kills millions.⁴ Trapping people in poverty and constraining economic growth are not viable options. 

As indicated in its latest International Energy Outlook, the U.S. Energy Information Administration projects that clean energy will grow faster than fossil fuel use.⁵ Globally, energy transition investments totaled $1.1 trillion in 2022, which is the first time these investments equaled the amount invested in fossil fuels. Whether it is renewables, batteries, geothermal or nuclear, making these energy sources cost-competitive will be essential to their wide scale global deployment. Nevertheless, fossil fuels will still be the predominant energy source.⁶ The International Energy Agency projects relatively steady oil and natural gas consumption through 2050, with a rapid decline of coal use (which may or may not happen).⁷ 100 percent renewable adoption, or even 100 percent clean energy adoption in emerging countries within the next few decades is unrealistic.⁸ Even with improved energy efficiencies, it appears that the world is headed for an energy expansion that includes a variety of energy sources rather than an energy transition.

Free enterprise and strong institutions play a significant role in reducing energy poverty, improving peoples’ lives, and ultimately improving the environment. One recent study in Finance Research Letters analyzed the effects of economic freedom on human wellbeing in Africa and, unsurprisingly, found that “free market economies with adequate supplies of electricity significantly improves the quality of life in the region.”⁹ In what is effectively a plea to inject more policies rooted in economic freedom, the authors stress that, “The effectiveness of economic freedom policy and access to electricity is more noticeable among countries with a lower quality of life, which suggests that if the qualities of institutions in poor African countries were strengthened and there were a constant supply of energy, the vast majority of Africans would prosper.”¹⁰

This is true not just of African nations but countries around the world that suffer from poverty because of totalitarian regimes, corrupt institutions, weak and poorly protected property rights, and economies that are largely closed to the world. It is a moral imperative for policymakers to protect and expand the personal and economic liberties so that the people they serve can have a higher quality of life. 

1. Aaron Chalfin et al., “Reducing Crime Through Environmental Design: Evidence from a Randomized Experiment of Street Lighting in New York City,” Journal of Quantitative Criminology, 2022 https://link.springer.com/article/10.1007/s10940-020-09490-6 [↩]
2.  “A Vision for Clean Cooking Access for All,” International Energy Agency, July 2023, https://iea.blob.core.windows.net/assets/75f59c60-c383-48ea-a3be-943a964232a0/AVisionforCleanCookingAccessforAll.pdf[↩]
3. “Africa’s population will double by 2050,” The Economist, March 26, 2020, https://www.economist.com/special-report/2020/03/26/africas-population-will-double-by-2050 [↩]
4.  Ibid.[↩]
5. “International Energy Outlook 2023,” Energy Information Administration, October 11, 2023,  https://www.eia.gov/outlooks/ieo/ [↩]
6. Ibid.[↩]
7.  “World Energy Outlook 2023,” International Energy Agency, 2023, https://iea.blob.core.windows.net/assets/ed1e4c42-5726-4269-b801-97b3d32e117c/WorldEnergyOutlook2023.pdf [↩]
8. Seaver Wang and Vijaya Ramachandran, “Why False Energy Hopes Are Bad for Africa,” Foreign Policy, October 5, 2023, https://foreignpolicy.com/2023/10/05/africa-climate-energy-transition-renewable-wind-solar-fossil-fuels-net-zero/ [↩]
9. Sofia Johan et al., “Does energy poverty moderate the impact of economic freedom on the quality of life in Africa? A panel quantile via moment approach,” Finance Research Letters, December 2023, https://www.sciencedirect.com/science/article/abs/pii/S1544612323009029 [↩]
10.  Ibid. [↩]