Weirdly enough, giving solar power to developing countries can actually cause their total carbon emissions to skyrocket.
March 25, 2026
Original Paper
Firm Structure, Labor Markets, and the Green Energy Transition in Low Income Economies
SSRN · 6461508
The Takeaway
In countries like Zambia that rely on hydropower, droughts cause massive power gaps. While solar subsidies help firms stay productive, the study finds that solar cannot scale fast enough to replace the lost hydro, and the resulting shifts in firm structure and economic demand actually push the overall energy mix toward more polluting backup sources.
From the abstract
Zambia, an economy heavily reliant on hydropower, has faced sustained disruptions to electricity generation amid increasingly frequent and severe droughts. These drought-related disruptions have caused large GDP losses and tilted electricity generation towards polluting sources, putting the green transition at risk. Current policy proposals aim to dramatically expand the share of electricity from solar. We study the impact of the green transition amid disruptions to hydropower electricity genera