Measuring energy poverty based on energy embodied in exports of vertical specialisation trade in the construction sector

Abstract

Energy requirements have expanded significantly in the process of global development while the energy crisis as an issue is becoming a limitation for economic development and environmental sustainability. The construction sector has contributed to the total energy consumption at a national and global level. The quality of human life is still impacted by energy and fuel poverty. This paper aims to examine the effects of energy embodied in intermediate and final goods of the construction sector on energy poverty from a perspective of vertical trade. The modified Energy Development Index (EDI) in the construction sector is applied to measure the extent of energy poverty in a country. Based on the World Input-Output Database (WIOD), the energy embodied in the exports of vertical trade has been measured in the construction sector. The results show that the developing trend in 40 countries increased in different increments in the research period. Comparing the results at the beginning and the end of the research period, the modified EDIs measured by energy embodied in exports of vertical trade increased in 19 countries but decreased in 21 countries. The positive implications for reducing energy/fuel poverty is proposed in policy making and strategic management in foreign trade within the construction sector.