Energy Poverty in China: Evaluation and Alleviation

By Kangyin Dong, Jun Zhao and Xiucheng Dong

Energy Poverty in China: Evaluation and Alleviation offers a thorough, methodological approach to energy poverty, which is a major obstacle in terms of the green or low-carbon transition of energy systems in China. The authors follow the framework of measurement, potential impact, and alleviation paths, supporting the design of effective energy and environmental policies for a globalized nation, especially considering the low-carbon transition of energy structures and energy poverty alleviation in the context of carbon neutrality.

The book begins by providing an overview of energy poverty, explaining the concept, summarizing the current situation globally and in China, and introducing the approach of the authors. The second chapter looks to build a comprehensive index system for the calculation of energy poverty in China. This is followed by three chapters that apply a range of methods to empirically assess the economic, environmental, and social effects of energy poverty. Individual chapters then explore specific alleviation paths, including digital economy, technological innovation, low-carbon energy transition, inclusive finance, and coal-to-gas/electricity policy.

This book is of interest to all those with an interest in energy poverty, energy and environmental policy, energy economics, carbon emission reduction, green growth, energy transition and renewable energy, including researchers, scientists, advanced students, engineers, R&D professionals, and policy makers or other experts at governmental or non-governmental organizations.

• Provides a comprehensive evaluation of energy poverty in China
• Analyzes the economic, environmental, and social impacts of energy poverty
• Explores alleviation paths across economy, technology, structure, finance, and policy

• Language: English
• Publisher: Elsevier Science
• Release date: Jan 19, 2023
• ISBN: 9780443158049

Kangyin Dong

Dr. Kangyin Dong is an Associate Professor in the School of International Trade and Economics, University of International Business and Economics, Beijing, China. His research interests include energy economics, climate change economics, and economics of natural gas and renewable energy. Dr. Dong serves for several academic journals as an Associate Editor including Energy Economics, Economic Analysis and Policy, Petroleum Science, and Journal of Economic Statistics. Dr. Dong has published more than 200 papers appearing in journals such as Energy Economics, Energy Policy, World Development, and The World Economy.

Book preview

Chapter One: An overview of energy poverty

Abstract

In this chapter, we first introduce the research background and significance of energy poverty, and then evaluate its research progress from the perspectives of concepts and global actions. Further, we summarize the current development of energy poverty in China and internationally. Finally, we present the research content and programs of the whole book. Through relevant analysis, we find that different countries and agencies have taken a variety of measures to alleviate energy poverty, with notable results. However, there are still some prominent problems in the process of energy poverty reduction. Moreover, energy poverty in developed economies is reflected mainly in energy affordability, while in developing countries, it is caused by energy availability.

Keywords

Energy poverty; Concepts; Current situation; Global actions; Research content

1.1 Introduction

1.2 Overview of research progress on energy poverty

1.2.1 The concepts of energy poverty

1.2.1.1 Fuel poverty

1.2.1.2 Energy poverty

1.2.2 Concrete global actions against energy poverty

1.2.2.1 Progress of international organizations in tackling energy poverty

1.2.2.2 Progress in tackling the energy poverty of developed and developing countries

1.3 Summary of the development situation of energy poverty

1.3.1 Development situation of international energy poverty

1.3.1.1 Global energy poverty alleviation has achieved preliminary results

1.3.1.2 Energy cost of energy poverty in developed countries is relatively high

1.3.1.3 The level of electricity service in developing countries is generally low

1.3.1.4 Developing countries rely heavily on inefficient kitchen appliances

1.3.2 Development situation of China's energy poverty

1.3.2.1 China's consumption of clean energy is gradually increasing, and full coverage of electricity has been achieved

1.3.2.2 Significant differences exist between urban and rural living energy use

1.3.2.3 Rural energy facilities are inefficient, and the prevalence of clean kitchen appliances is low

1.4 Research contents and programs in this book

1.4.1 Research thoughts

1.4.2 Research contents

1.4.3 Research techniques

1.4.4 Technical route

1.5 Conclusions

References

1.1. Introduction

In recent years, to vigorously facilitate the development of industrialization and evolution of globalization, various countries have begun to take the road of industrialization, which has consumed a large amount of energy and raw materials and severely damaged the ecological environment. This has led to irreversible negative impacts on nature and society, resulting in three major global crises: resource shortage, environmental pollution, and ecological destruction (Cai et al., 2018; He et al., 2018a; Liu et al., 2020). To curb the increasing deterioration of the ecological environment and maintain the homeland in which people live, each country began to set up environmental protection and regulatory agencies to supervise and punish pollution behaviors through the enactment of a complete set of environmental laws, such as Hungary's new Environmental Law and Japan's Basic Environmental Law (Nakamaru, 2010; Szilágyi, 2015). Furthermore, all countries have combined administrative means, such as environmental standards and environmental licenses, with economic means, such as environmental investment and preferential measures, to contribute to global energy saving and emission reduction.

In addition to taking individual measures to accelerate ecological improvement, the joint efforts and active cooperation of countries also demonstrate the determination of institutions and regulators to ensure environmental protection for their people. For instance, the Kyoto Protocol, established in 1997 by the United Nations Framework Convention on Climate Change, aims to limit the greenhouse gas emission of developed countries to curb global warming (Kuriyama and Abe, 2018; Maamoun, 2019). This is the first time in human history that greenhouse gas emissions have been legally limited. Furthermore, the Paris Agreement, reached at the Paris Climate Conference in December 2015, became the second legally binding climate agreement after the Kyoto Protocol (McCollum et al., 2018; Schneider and La Hoz Theuer, 2019). The generation of environmental pollution is a process from quantitative change to qualitative change, which will harm the health and social welfare of residents, restrict economic development, and significantly inhibit harmonious evolution and sustainable socioeconomic development.

Currently, as the world's second-largest economy and the largest carbon emitter, China's remarkable achievements have led to the depletion of limited resources and the deterioration of the ecological environment. In the context of global advocacy of energy saving and emission reduction, China should shoulder its responsibilities as a major country (Li et al., 2011; Li and Xu, 2020; Zhou et al., 2016). Energy, as an indispensable material basis for the survival of human society, plays a crucial role in the process of social development and economic construction; accordingly, energy demand is rising. According to the China Statistical Yearbook released by the National Bureau of Statistics, China's gross domestic product increased from 172 billion yuan in 1965 to 100,636.33 billion yuan in 2020, an increase of 585 times. At the same time, the statistics of the World Energy Statistical Yearbook 2021 show that China's total energy use increased from 5.52 exajoules in 1965 to 145,46 exajoules in 2020, approximately 26 times (see Fig. 1.1). Driven by the current rapid processes of industrialization and urbanization, China's energy demand will continue to increase. On the one hand, it offers an energy guarantee for the rapid and stable development of the economy and society; on the other hand, the energy structure, dominated by high-carbon fossil energy, will continue to deteriorate the ecological environment. Therefore, against the background of tightening resource constraints and worsening environmental pollution, it is imperative to improve the ecological environment and accelerate the adjustment of the energy structure.

Figure 1.1  The time trend of gross domestic product and primary energy consumption between 1965 and 2020. Credit: Book authors.

In this process, energy poverty has become a major obstacle and main challenge restricting the green and low-carbon transition of the energy system. The concept of energy poverty proposed by the International Energy Agency (IEA) usually applies to developing countries, which emphasizes that residents are highly dependent on traditional biomass energy, such as firewood, straw, and kerosene and highly polluting fossil energy, such as coal. The IEA also points out that in developing countries there is a lack of relatively clean natural gas, green electricity, and clean kitchen utensils (Dong et al., 2022; Zhang et al., 2021; Zhao et al., 2021). On the one hand, the existence of energy poverty and the lack of clean energy reduce opportunities for the evolution of modern economies, deteriorate the ecological environment, and limit the acquisition of biomass energy by cutting and picking, which shortens the time for labor to generate income. Meanwhile, the high cost and expenditure of clean energy consumption increase the difficulty of reducing household energy poverty. On the other hand, inefficient burning of traditional biomass energy releases high levels of fine particulate matter, which can harm the health of household residents. In addition, Apergis et al. (2022) and Banerjee et al. (2021) point out that the lack of modern energy services is one of the main reasons for the low level of education of residents, which hinders the realization of social equity and common prosperity. In other words, the existence of energy poverty has become an important obstacle to the rapid evolution of three dimensions: economy, society, and the environment. Accelerating the process of energy poverty alleviation plays an important role in stimulating energy saving and emission reduction and achieving the Millennium Development Goals.

Under the above circumstances, a comprehensive understanding of the relevant theories and development status of energy poverty can lay a foundation for subsequent research on energy poverty alleviation. Therefore, this chapter first defines the concept, reviews the relevant theories, summarizes the development situation of energy poverty at home and abroad, and provides a theoretical reference for follow-up research on energy poverty. Finally, we provide and design the book's research thoughts, research contents, research strategies, and technical route.

1.2. Overview of research progress on energy poverty

1.2.1. The concepts of energy poverty

At present, the concepts of energy poverty widely recognized and accepted in the world include fuel poverty and energy poverty, which have been defined by different institutions and scholars, as follows:

1.2.1.1. Fuel poverty

It is worth noting that the concept of fuel poverty originated mainly from the fuel tenure movement in the early 1970s in the United Kingdom (UK); this concept stresses that households or residents do not have sufficient economic basis to purchase energy-related services. Accordingly, fuel poverty has gradually become an important subject of academic analysis in Europe. To be more specific, Lewis (1982) believes fuel poverty refers to the fact that the high cost of basic living limits the energy consumption of low-income groups and makes it difficult for them to meet their basic energy needs, while Boardman (1991) supports the concept of energy poverty that low-income groups need to spend more than 10% of their income on energy to maintain indoor comfort. Notably, the latter was adopted by the Statistical Report on Fuel Poverty issued by the British government in 2001. On this basis, Boardman (2010) redefined fuel poverty in 2010, suggesting that fuel poverty is reflected mainly in the inability of existing living energy to meet the basic needs of households or residents. Excessive energy use or energy consumption that makes it difficult to keep indoors warm is considered fuel poverty. Hills (2011) stresses that energy poverty is manifested mainly in low income and high costs for households or residents. Energy poverty is also defined as being present when the costs and expenditure of basic fuel needs for domestic heating or cooking are significantly higher than the national average and the income allocated to savings is obviously lower than the economic poverty line published by official agencies. These two definitions have been endorsed by the government of the UK and were used in the Statistical Report of Fuel Poverty in 2013 (DECC,