Smart governance and smart urbanization: Digital solutions to alleviate energy poverty in major energy consuming economies

Abstract

Energy is vital for economic development because it is an input in almost every sector of the economy. For households, it is considered a basic necessity. Given the significance of energy in driving the economies, the issue of energy poverty is a serious concern for policymakers worldwide. Literature suggests that the digitalization of the economy can play a vital role in addressing this concern. However, none of the past studies have investigated how digitalizing the government and urban life can help alleviate energy poverty. This analysis is an effort to plug this gap in the literature. Thus, the primary objective of the analysis is to investigate the impact of smart governance and smart urbanization on energy poverty in 55 major energy-consuming economies from 2003 to 2022. The analysis is the first of its kind to analyze how digital technologies within governance and urban planning frameworks help alleviate energy poverty in major energy-consuming economies. Empirical analysis is performed using the generalized methods of moments (difference and system). The results indicate that smart governance and ICT-based smart urbanization help alleviate energy poverty in the full sample of developed and developing economies. In addition, urbanization and ICT also help to alleviate energy poverty in the full sample of developed and developing economies. On the other hand, GDP increases energy poverty in the case of the full sample and developing economies while alleviating energy poverty in developed economies. The effects of smart governance and smart urbanization are more prominent in developed economies due to their increased reliance on digital technologies. This suggests that policymakers in major energy-consuming economies, particularly developing ones, should increase the role of digital technologies in the government sector and urban lifestyles to alleviate energy poverty.