Energy poverty dynamics and geostrategic shocks: Moderation of financial markets
Publication Name: Energy Policy
Publication Date: 2026-08-01
Volume: 215
Issue: Unknown
Page Range: Unknown
Description:
Universal energy poverty is a key ingredient to social inequality, education barrier and poor health outcome. Therefore, it is crucial for policymakers to identify the factors that mitigates energy poverty. Present study examined the influence of geopolitical risk on energy poverty, focusing on financial market depth, access and efficiency in 42 economies, spanning 2000 to 2022, using instrument variable two stage least square (2SLS), three stage least square (3SLS) approach and double panel threshold regression. The estimation provides following observations. First, geopolitical risk significantly intensify energy poverty over time. Second, natural disasters is a more serious hindrance to energy access. Third, financial markets significantly moderates the favourable spillover effects of geopolitical risk on energy poverty, dampens negative effect of geopolitical risk, improving household energy access, and reducing vulnerability to external shocks. Alongside this, the research provide similar pattern in urban and rural concentration, indicating the severe effect of geopolitical and natural disaster risk in rural areas. Moreover, the research explored several other factors and prioritizes digitalization, economic growth and political liberty as the major attributes for mitigating energy poverty. Hence, this research, provides stronger support for the roles of financial markets and digitalization in mitigating the energy poverty in the long run. This paper further delves into the policy implications arising from the findings.
Open Access: Yes