Why Rising Income Alone Can’t Deliver Clean Energy Transitions in Developing Nations

Household pollution patterns across 109 countries show that rising income alone does not guarantee cleaner energy use, as poor infrastructure keeps many families locked into dirty, high-pollution fuels. Meanwhile, wealthier households generate most outdoor pollution through vehicle ownership, creating a dual burden where the poor breathe the worst indoor air while the rich contribute more to ambient emissions.

A major study led by the World Bank’s Office of the Chief Economist, Planet Vertical, using household surveys harmonized through the Climate Policy Assessment Tool (CPAT) and the IPUMS-DHS research program, delivers one of the most expansive analyses ever conducted on how household income influences pollution intensity. Using data from 109 countries, the research shows that rising income does not automatically lead households to adopt cleaner energy. Instead, infrastructure, public service delivery, and fuel availability determine whether households can translate higher income into safer, less polluting consumption choices.

The Logic Behind Environmental Engel Curves

Environmental Engel Curves (EECs) build on traditional Engel curves, replacing the measurement of spending with the measurement of pollution embodied in consumption. As income rises, households typically consume more, raising total pollution through the income effect. At the same time, higher income allows them to substitute away from inferior, dirtier fuels such as wood, charcoal, and kerosene toward electricity, LPG, or natural gas, the substitution effect. The final shape of the EEC depends on which force dominates. The study’s global dataset, larger than any used before, reveals that these curves vary drastically across low-, middle-, and high-income contexts.

Why Poor Households Stay Trapped in Polluting Fuels

The research finds that in low-income countries, high-pollution fuels behave like normal goods: as households grow richer, they consume even more firewood, charcoal, and kerosene. This counterintuitive trend stems from chronic infrastructure shortages, especially limited electricity access and unreliable modern-fuel distribution. Even wealthy households in these countries remain locked into dirty fuels because cleaner alternatives are simply unavailable or inconsistent. In contrast, in lower-middle-income countries, a clear turning point emerges: as income rises, households begin shifting toward LPG and electricity, though rural–urban gaps remain stark. In upper-middle-income countries, clean fuels dominate rapidly, and the share of dirty fuels declines even among the poorest.

Indoor Pollution: The Hidden Inequality

Indoor air pollution emerges as a profound and unequal health burden. DHS data show that in low-income countries, reliance on dirty cooking fuels remains extremely high across all wealth groups. In lower-middle-income countries, this dependence drops sharply with income, while in upper-middle-income countries, even the poorest households use far fewer polluting fuels. Electricity access mirrors these disparities. In low-income countries, access remains extremely low until the top wealth quintile; in lower-middle-income countries, it rises from about 45 percent among the poorest to nearly universal among the richest; in upper-middle-income countries, even the poorest quintile exceeds 80 percent. Rural households consistently lag behind urban ones, reinforcing the central message: income alone cannot deliver clean energy transitions; public infrastructure must pave the way.

Outdoor Pollution: A Growing Burden Among the Wealthy

The study also shows that outdoor air pollution is disproportionately driven by richer households. Vehicle ownership rises sharply with wealth in lower-middle-income and upper-middle-income countries. In low-income countries, car ownership remains negligible except among the richest, but motorcycle ownership climbs steadily with income. In upper-middle-income countries, car ownership jumps from 10 percent among the poorest to more than 60 percent among the richest. This creates a dual burden: poorer households inhale the most hazardous indoor air from biomass fuels, while richer households generate the bulk of outdoor air pollution, affecting entire communities.

A Global Pattern Shaped by Infrastructure, Not Just Income

Across all 109 countries, a consistent pattern emerges: the transition to cleaner household energy is not determined by income alone but by state capacity, electrification, fuel distribution systems, and the availability of modern services. Environmental Engel Curves reveal how deeply infrastructure governs the pollution intensity of daily life. Without targeted interventions, especially in rural regions and low-income countries, millions will remain locked on the lowest rungs of the energy ladder, suffering preventable health risks while contributing little to overall emissions.

The study underscores that pollution inequalities are structural, not individual. To make cleaner energy accessible, governments must invest in electricity networks, ensure affordable LPG distribution, and anticipate the surge in transport-based emissions as countries grow richer. Only then can rising income translate into healthier households and cleaner environments.