The World Bank and the UN celebrate the fact that global poverty was halved – a goal which was set by the international community as one of the Millennium Development Goals. This is a milestone achievement. But there is another story behind the headline that both the World Bank and UN glossed over – virtually all of the world’s poverty reduction between 1981 and 2008 took place in China.
World Bank estimates show that the percentage of those living below $1.25 a day in China decreased from 84% to 13% between 1981 and 2008. During this time China lifted 662 million people out of poverty. Unfortunately not all countries shared the same destiny. Outside of China there are now more people living on $1.25 a day than there were in 1981.
What the World Bank’s analysis doesn’t say is that coal played a key role in reducing poverty in China. During the period 1980-2008 Chinese annual coal consumption increased by more than 400% from 626 million tonnes to 2.7 billion tonnes.
Electrification is a vital component of China’s poverty alleviation campaign which has built up basic infrastructure and created local enterprises throughout China. As a result, from 1985 to 2003, electricity production in China rose by over 1500 TWh, of which around 80% is coal-fired.
No other poverty alleviation strategy in the modern history has been more effective than the one implemented by China and yet the current draft of the Rio +20 declaration says nothing about coal-based electrification and the necessary expansion of business and industry in the world’s poorest countries.
Significant on-grid electrification is essential for reducing poverty. The IEA says that in order to address the problem of energy poverty coal will have to provide half of the on-grid electricity connections in areas currently suffering from energy poverty globally. This electricity will help power the economic and social infrastructure that is essential to lifting people out of poverty.
The world’s leaders should finally come to grips with the challenge of poverty and support the deployment of advanced coal technologies in the developing countries that want to use coal to fuel their economic development – something that many governments will want to do looking at the Chinese example.