Low-carbon transition and energy poverty: quasi-natural experiment evidence from China’s low-carbon city pilot policy

Abstract Low-carbon transition stands as a vital strategy for the global community to address the challenge of climate change, inevitably affecting residents’ daily lives. However, there is a notable gap in the quantitative analysis of the low-carbon transition’s impact on energy poverty in developing countries, limiting policymakers’ understanding of the inherent mechanism and their ability to take informed actions. This study investigates the low-carbon city pilot (LCCP) policy, China’s key low-carbon initiative, as a quasi-natural experiment, using the difference-in-differences (DID) method to examine its impact on residents’ energy poverty conditions. Utilizing panel data from 4807 households in the CHARLS dataset, this study effectively integrated household-level and city-level data. Benchmark regression indicates that the LCCP policy exacerbates energy poverty among residents. Further analysis reveals the pivotal role of energy infrastructure and expenditure in bridging the nexus between the LCCP policy and energy poverty, providing crucial insights into the potential pathways through which this policy impacts energy poverty. Additionally, heterogeneity analysis indicates that the impacts of LCCP policy are more pronounced in eastern cities, non-resource cities, and high administrative-level cities, as well as in the communities suffering from subpar governance quality. By leveraging reliable survey data and robust quantitative methods, this study not only broadens the methodology of energy poverty studies but also offers valuable insights for developing countries to safeguard residents’ energy welfare amid low-carbon transitions.