How does energy poverty eradication realize the path to carbon unlocking? The case of China

Abstract

The energy poverty (EP) trap empowers policymakers to confront urgent issues related to energy, which also gives them the opportunity to deal with the dilemma of carbon lock-in (CLI). Based on provincial-level data in China during 2002–2017 and by employing the Instrumental Variable-Generalized Method of Moments (IV-GMM) estimation model, we empirically examine the direct impact of EP on CLI, as well as the asymmetric effects on CLI from EP. This paper also documents the moderating and mediating effects of the EP-CLI nexus. We find that (1) EP significantly leads to a higher level of CLI, and their positive relationship means that alleviating EP is essential for cutting CLI. A rise of 1% in EP results in a corresponding increase of 0.1680% in CLI.; (2) EP shows a more obvious positive influence on CLI in areas with a lower level of CLI; (3) renewable energy technology innovation shows a moderating role and helps to reduce the positive impact of EP on CLI, which means the synergic effect of EP and technological innovation reduces the externalities of EP on CLI; (4) EP directly influences CLI by restraining carbon efficiency by encouraging the use of transitional fossil fuels and inhibiting energy consumption transition. EP also directly exacerbates the CLI dilemma. Therefore, we propose some suggestions for policymakers to address the trap of EP and cope with the dilemma of CLI.