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Impact of financial decentralization on energy poverty and energy demand tendencies in Chinese settings

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Abstract

This study intends to test the connection between fiscal decentralization, energy demand dynamics, and energy poverty status from the context of China. The study has collected large datasets ranging from 2001 to 2019 to justify the empirical findings. The long-run analysis economic techniques were considered and applied for this. The results indicated that a 1% adverse change in energy demand dynamics causes 13% of energy poverty. Supportively, a 1% positive rise in energy supply to fulfill energy demand reduces energy poverty by 9.4% in the study context. Moreover, empirical findings show that a 7% rise in fiscal decentralization accelerates 19% fulfillment in energy demand and mitigates energy poverty up to 10.5%. We demonstrate that if enterprises can only alter their technology choices in the long run, the short-run reaction of energy demand must be less than the long-run response. Second, we demonstrate that the elasticity of demand approaches its long-run level exponentially at the rate defined by the capital depreciation rate and the economy’s growth rate, using a putty-clay model with induced technical development. According to the model, it takes more than 8 years for half of the long-run impact of induced technological change on energy consumption to be realized in industrialized nations once the carbon price is implemented. This research document also gives multiple policy directions for policy developers.

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Data availability

Data is publicly available at mentioned sources in data section.

Materials availability

Data is publicly available at mentioned sources in data section.

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Authors and Affiliations

  1. Business School, China University of Political Science and Law, Beijing, 100088, China

    Jianhe Wang

  2. Central Conservatory of Music, Beijing, 100031, China

    Ziman Xiang

  3. School of Mechanical Engineering, Beijing Institute of Technology, Beijing, 100081, China

    Xiaohan Jiang

  4. School of Economics and Management, Beijing Forestry University, Beijing, 100083, China

    Lei Wang

  5. School of Economics, Peking University, Beijing, 100871, China

    Lei Chang

Authors
  1. Jianhe Wang
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  2. Ziman Xiang
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  3. Xiaohan Jiang
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  4. Lei Wang
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  5. Lei Chang
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Contributions

Write up corrections, data curation, and supervision: Jianhe Wang; visualization, editing, and writing of draft: Ziman Xiang; writing and software: Xiaohan Jiang; writing, editing, and visualization: Lei Wang; conceptualization, methodology, review, and visualization: Lei Chang.

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Correspondence to Lei Chang.

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Wang, J., Xiang, Z., Jiang, X. et al. Impact of financial decentralization on energy poverty and energy demand tendencies in Chinese settings. Environ Sci Pollut Res 30, 70386–70396 (2023). https://doi.org/10.1007/s11356-023-26731-w

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