The impacts of the informal economy, climate migration, and rising temperatures on energy system planning

Abstract

This study aims to investigate the impacts of the informal economy, climate migration and temperature changes on energy demand and long-term urban energy system planning. The elasticity of energy demand to changes in the size of the informal sector, urban population and mean temperature is estimated for the case study city of Accra, Ghana. Elasticities are then applied to estimate energy demand under different Shared Socioeconomic Pathways (SSPs). An energy system optimization model analyzes SSP impacts on energy planning. Accra's energy demand is found to be most elastic to climate change-induced migration and rising temperatures; for example, energy demand is up to 43% higher in 2050 in a worst-case scenario compared to the base case. These factors will exacerbate the city's ability to meet its sustainability targets and manage informal sector growth. Photovoltaics, waste CCP and decarbonization of the transportation sector through electrification are found to be critical solution pathways for Accra to meet rising demand while supporting sustainability objectives. However, significant local distribution grid upgrades are required to support these technologies' rollout. Overall, this work demonstrates the importance and value of incorporating climate migration, rising temperature and informal sector analysis in energy planning models and decision-making processes, particularly in low and middle-income countries that are the most vulnerable to climate change. Although the approach is demonstrated on Accra, it can be applied at other scales and scopes globally.