Energy poverty through the lens of the energy-environmental Kuznets curve hypothesis

Abstract

We revisit the concept of energy poverty by considering population's access to energy consumption. We stress critical relevant linkages including (i) economic growth and energy consumption, (ii) energy consumption and income inequality and (iii) economic growth and electricity production. Our analytical framework is based on a panel data-set from over 200 countries for the period 2000–2019. To the best of our knowledge, this is the first study to focus both on a global aggregate sample and on the differences between high and low income economies. Main findings provide support to the Energy-Environmental Kuznets Curve hypothesis. We find that, the link between economic growth and renewable energy exhibits a U-shaped curve, while that between economic growth and fossil fuel energy consumption, an inverted U-shaped curve. In addition, an increase in renewable energy consumption reduces income inequality. Furthermore, stronger economic growth positively affects electricity production from renewable sources, while it reduces electricity production from coal. Finally, results remain qualitatively similar across different levels of income, and while controlling for potential endogeneity. Findings raise important policy implications, particularly considering the impact of renewable energy on energy poverty.