Can energy transition interventions promote financial inclusion? Measuring unintended effects of Ghana's energy transition program

Abstract

Global concerns about climate change and its effects and the quest for sustainable development have necessitated policy actions, including energy interventions. Besides the intended goal of energy transition, these interventions often have unintended impacts, which ought to be measured when assessing the overall effects of these energy interventions. This study investigated the impact of a clean cooking fuel transition program in Ghana on financial inclusion. It used a cross-sectional survey of over 900 households in two districts in Ghana where a clean energy transition intervention had been implemented. The study employed linear probability and matching techniques and found that clean energy interventions can promote financial inclusion among beneficiary households. The probability of being significantly associated with financial inclusion is at least 6.6% higher for treated households than it is for households that did not benefit from the program. The findings are robust across different outcome variables and the potential transmission mechanisms are discussed. The study provides evidence for policymakers to count the effect of financial inclusion in measuring the program's overall impact. Furthermore, the findings underscore the need for policies that provide the needed infrastructure and financial ‘ecosystem’ to support financial inclusion, particularly in rural areas where the energy interventions are implemented.