Income inequality, energy poverty, and energy efficiency: Who cause who and how?

Abstract

Addressing income inequality and energy poverty have become priorities in China's policy agenda. To explore the impacts of energy efficiency on income inequality and energy poverty in China, this study constructs a dynamic panel model using a balanced panel dataset covering 30 provinces for the period 2004-2017. By applying the system-generalized method of moments (SYS-GMM), we estimate the role of energy efficiency and conduct a regional heterogeneous and asymmetric analysis. We also discuss the potential moderating effects in the relationship between energy efficiency and energy poverty as well as income inequality. The main findings show that (i) improved energy efficiency can simultaneously alleviate income inequality and energy poverty, (ii) significant heterogeneity and asymmetry exist in the impacts of energy efficiency on energy poverty and income inequality, and (iii) the government can alleviate income inequality and energy poverty by enhancing the contribution of energy efficiency through technological evolution and increased support for green innovation. Based on the above findings, this study proposes several policy implications to reduce income inequality and energy poverty.