The role of green finance in eradicating energy poverty: ways to realize green economic recovery in the post-COVID-19 era

Abstract

Realizing green economic recovery and eradicating energy poverty have become China’s strategic priorities in the post-COVID-19 era. In the context of the active advocacy of green finance, to empirically investigate whether green finance can help eradicate energy poverty, this study utilizes provincial sample data to explore the energy poverty eradication effect of green finance. Our study also examines the regional heterogeneity and mediating effect. The main findings are as follows: (1) Green finance is a powerful weapon to alleviate China’s energy poverty and accelerate green economic recovery, indicating that the green evolution of financial institutions is effective means to facilitate green economic recovery in the post-COVID-19 era; (2) green finance only eradicates energy poverty in low energy poverty regions and the eastern areas, and green finance can alleviate energy poverty in both high and low green finance areas; and (3) improved green finance not only directly eradicates China’s energy poverty, but also alleviates current energy poverty by accelerating technical innovation and optimizing the industrial structure. Following the above main findings, this study advances a series of policy implications in terms of facilitating the green transition of the financial industry and realizing green economic recovery.