Energy inefficiency as a ‘poverty premium’

Abstract

This paper presents the concept of energy inefficiency as a poverty premium. Whilst concepts of energy poverty, vulnerability, and justice have highlighted the uneven distribution and impacts of a lack of access to sufficient energy services, they do not fully capture how people who are already financially disadvantaged pay more as a result of energy inefficiency. We therefore draw on the well-established idea of the “poverty premium” – which has achieved significant political resonance in other policy areas – to highlight how the condition of energy inefficiency can cause people who are financially and materially disadvantaged by poverty to pay a range of premiums. We identify several mechanisms via which these premiums arise: tenure; affordability; finance; investment; behaviour; and policy. Whilst we focus on detailed examples from England (United Kingdom), we also show how energy inefficiency-related poverty premiums are widely applicable across diverse contexts. We argue that the concept is accessible to a wide range of stakeholders, directly addressing key sites of unfairness and injustice in domestic energy efficiency.