Do energy intensity, resource abundance and inequality drive energy poverty? Evidence from developing countries

Abstract

Energy poverty in developing countries is a critical issue characterized by the lack of access to modern energy services, such as electricity and clean cooking facilities, as marked in SDG 7. This study explores the correlations between energy poverty, energy intensity, resource abundance, and income inequality, as these factors have been theorized to play important roles in influencing energy poverty in developing countries. By observing that the dataset is heterogeneous across the countries and over the time frame, we use the Method of Moments Quantile Regression (MMQR) to analyze our developing countries’ data from 2000 to 2019. Our findings indicate that energy intensity is a significant factor influencing energy poverty, suggesting that higher energy consumption relative to the sample countries can exacerbate this issue. Additionally, we observe that income inequality within the sample countries is a critical determinant of energy poverty levels, highlighting the dynamics between economic disparity and access to energy resources. Interestingly, our study reveals that resource abundance acts as a blessing rather than a curse in terms of energy poverty, implying that countries rich in natural resources may have better opportunities to combat energy deprivation. Finally, we emphasize the vital role of financial markets in addressing energy poverty on a global scale, suggesting that robust financial systems can facilitate investments and innovations aimed at improving energy access for vulnerable populations. The results from the robustness supports the empirical results obtained from the main estimation. The empirical findings of the present study advance important comprehensions for policymakers to adopt energy policies that address the complex challenges of energy poverty and promote inclusive energy access.