Energy inequality in the Eurasian Economic Union

Abstract

This paper aims at assessing energy inequality, which is at the center of SDG7, in the Eurasian Economic Union – a recently created international organization with arguably the closest integration in the energy sphere for all member states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. The research was performed with the use of cross-disciplinary methods, including literature review, analysis of policy documents (applied policy analysis), and two quantitative tools widely used for energy policy analysis – the decomposition of energy consumption based on the Logarithmic Mean Divisia Index and the inequality estimation by using the Theil index. The study identified contribution of three types of factors to energy consumption of the entire Eurasian Economic Union: economic growth − the increase of GDP, the relative structural changes in the economy, and energy intensity shifts. Theil index allowed determining the level of inequality in the region's energy consumption. The quantitative analyses demonstrated that in 2000–2017 the increase of GDP and energy intensity in the region were the main reasons that had determined the growing energy consumption. Theil index analysis showed that inequality of GDP-related energy consumption is decreasing, whereas the population-related inequality is increasing. Additionally, policy implications for inclusive and sustainable energy integration in the region are discussed. The required policy changes range from introducing amendments to the Eurasian Economic Union Treaty and structural changes to very precise science and technology policy tools.