Small technologies make a big difference: Alleviating energy poverty to improve air quality

Abstract

Air pollution affects health and has implications for the economy and society. We present fresh evidence related to energy poverty alleviation and the impact of household practices on reducing air pollution, specifically the use of clean fuels and modern technologies for cooking. Estimates are applied to 84 low- and middle-income countries over the period 2010 – 2019. We conduct a comprehensive analysis by: (i) employing panel data estimates to identify the effect of energy poverty alleviation on air pollution; (ii) examining sources of heterogeneity in the influence of energy poverty alleviation in rural and urban areas, and analyzing the moderating impact of factors including institutional quality, human capital accumulation, internet diffusion, and financial development; (iii) using instrumental variables for given income thresholds as a robustness check. The results suggest that providing basic technologies for living, notably clean fuels or modern technologies for cooking, can improve air quality. Interestingly, this effect is more prominent in rural areas and countries with higher levels of financial development, better institutional quality, and higher internet usage. The findings align with the views of policymakers and economists who advocate increased funding to enhance clean energy for households to mitigate air pollution.