Rethinking energy poverty alleviation through financial inclusion: Do institutional quality and climate change risk matter?

Isaiah Maket

Utilities Policy, 2024, vol. 91, issue C

Abstract: The main aim of this paper is to determine the impact of financial inclusion on energy poverty alleviation. It also interrogates whether institutional quality and climate change risk significantly influence the financial inclusion-energy poverty alleviation link using balanced panel data from 34 Sub-Saharan African countries from 2004 to 2021. Evidence from Discroll-Kraay Fixed Effects and Two-Step Instrumental Variable Generalized Method of Moments (2SIV-GMM) depicts heterogeneous energy poverty-alleviating impact of financial inclusion, demonstrating that financial inclusion is more instrumental in lower-income than lower-middle-income countries. Also, the results indicate a significant positive moderating role of institutional quality and a detrimental effect of climate change risk on financial inclusion-energy poverty alleviation nexus. Nevertheless, Dynamic Panel Threshold Regression results reveal threshold effects of financial inclusion, institutional quality, and climate change risk on energy poverty alleviation. The paper professes that financial regulations in allocating green resources would aid in alleviating energy poverty in Sub-Saharan Africa.

Keywords: Financial inclusion; Energy poverty; Institutional quality; Climate change risks; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:91:y:2024:i:c:s0957178724001139

DOI: 10.1016/j.jup.2024.101820

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