Who suffers from energy poverty in household energy transition? Evidence from clean heating program in rural China

It can be challenging to provide energy that is both clean and affordable. In northern rural China, a household clean heating program has been adopted, requiring households to transition from coal to electricity and natural gas. This program led to an unintended sharp increase in the burden of heating cost for enrolled households, even with large subsidies. To investigate this policy-induced increase in energy poverty, we conducted a large-scale household survey in northern China. We find that energy poverty, measured in multiple dimensions, is significantly increased by replacing coal with electricity and gas, while it is decreased by replacement with clean coal. Econometric analysis shows that the change in energy poverty is heterogeneous in several ways. It remains stable in Beijing, but increases by 70% in the much less developed neighboring province of Hebei. Households with lower income, less education, and smaller household size are more likely to experience energy poverty. Those with lower income and no insulation for their houses are negatively affected to a larger degree. These findings provide empirical evidence that a mandatory one policy for all is likely to hurt low-income households more. It calls the attention of policy makers to the distributional effect when designing energy transition policies for a clean and low-carbon economy.

Automated summary

In northern rural China, the transition from coal to electricity and gas for heating has led to an unintended increase in energy poverty, despite large subsidies. The increase in energy poverty is heterogeneous, with Beijing experiencing stability while the neighboring province of Hebei seeing a 70% increase. Lower income, less education, and smaller household size are factors that increase the likelihood of experiencing energy poverty.