Clean energy transition and intertemporal socio-economic development: Evidence from an emerging market

Abstract

Lack of access to efficient energy comes with a huge cost in terms of health costs, monetary costs, and various socioeconomic consequences. In this paper, unlike the existing studies that focus on health and wellbeing effects associated with energy poverty, we investigate whether the household transition from polluting energy to clean energy leads to household socioeconomic development, in line with the UNDP human development index. Mapping households in two waves of Indian Human Development Survey Data 2005 and 2012, we find that compared to the matched sample of households that did not undergo transition into clean energy (control group), the households which underwent clear energy transition experience an average 12.2% improvement in their household development. Our results remain the same after testing for potential endogeneity. Contrary to our expectations, we also find that household consumption of polluting energy sources persists even with increased clean energy consumption. The stronger preference for polluting energy consumption demands both government intervention and further research.