Can energy poverty be alleviated by targeting the low income? Constructing a multidimensional energy poverty index in China

Abstract

Energy poverty alleviation is one of the key targets of the Millennium Development Goals. Based on Alkire & Foster theory, five dimensions reflecting modern energy use, dwelling and home appliance, access to stable electricity service, basic energy demand, and ratio of the energy bill to income are covered in the multidimensional energy poverty (MEP) index, and the energy deprivation of households in China is analyzed by using the panel data of CFPS 2014 to 2018. From a comparison of the samples identified by MEP and income poverty, a positive correlation is found, which indicates that the policies targeting the income-poor families could also alleviate MEP to a certain extent, especially for the families with extreme poverty levels. However, more than 90% of MEP households are excluded by income poverty and are insufficiently supported for the lack of specific energy poverty policies. By analyzing the factors affecting the inconsistency of the two types of poverty, it is concluded that big family size contributes to the polarization of the two types, meaning that the policies targeting the income-poor houses might fail to help in big families. Accordingly, a specific policy on energy poverty is recommended as an enhancement or supplement for income support.