Escaping the Energy Poverty Trap: Policy Assessment

Elisenda Jové-Llopis () and Elisa Trujillo-Baute
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Elisenda Jové-Llopis: Universitat de Barcelona

Environmental & Resource Economics, 2024, vol. 87, issue 12, No 9, 3335-3355

Abstract: Abstract Climate change and the ongoing energy transition can increase energy poverty rates. To date, the main tool employed to alleviate energy poverty has involved income transfers to vulnerable households. However, measures that seek to improve a home’s energy efficiency have recently gained increasing relevance. In this study we assess the effectiveness of these two types of policy, assuming universal coverage and optimal behaviour. Results points that income transfers and energy efficiency measures have the potential to decrease the proportion of households in energy poverty; however, the magnitude of their respective effects differs greatly. The average impact of energy efficiency measures provides for a greater reduction in energy poverty rates than income transfer policies. Although the greatest reduction in energy poverty is obtained by combining both measures, this combination of tools leads to overlapping effects with income transfers making only a marginal contribution once total retrofit have been implemented.

Keywords: Energy poverty; Vulnerable households; Energy expenditure; Energy efficiency; Policy evaluation (search for similar items in EconPapers)
JEL-codes: H31 L94 Q48 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10640-024-00918-2

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