Export clean, but live dirty: reconciling power exports, decarbonisation and clean cooking in Lao PDR

Renewable electricity is often expected to strengthen energy security, improve public health and reduce emissions by replacing fossil fuels. These benefits may not extend across the energy system in hydropower-rich economies that export electricity while relying on imported transport fuels and solid biomass for cooking. Lao PDR is an example of this disconnect. It exports approximately two-thirds of its electricity generation, imports nearly all liquid fuels and meets about 97% of cooking demand with solid biomass. We use a whole-energy-system model of Lao PDR, coupled to household air pollution accounting, to examine three policy choices: how much hydropower is retained for domestic use, how tightly carbon emissions are capped, and how quickly cooking-related air pollution is reduced. We combine three levels of ambition for each policy in 27 scenarios. The three policy levers largely address their targeted outcomes, with limited cross-objective benefits. The best cooking intervention averts 0.9 million of the 3.3 million healthy life-years otherwise lost to household air pollution between 2023 and 2050. This also brings a modest transport-related climate benefit. Neither the carbon cap nor changes to hydropower exports reduce the health burden from cooking. Using more hydropower domestically lowers system costs by USD 4–8 billion, depending on whether long-term export contracts are revised. The liquid-fuel import bill falls from USD 48 billion to USD 29 billion only when transport decarbonisation is imposed. The cost-optimal pathway and the pathway with the least health burden do not achieve overall emissions reductions. For the Lao PDR, abundant renewable electricity does not, by itself, reduce the dependence on imported fuels, household air pollution, or emissions across the energy system. Each problem requires a policy directed at it.