How temperature shocks impact energy poverty in Vietnam: mediating role of financial development and environmental consideration

Que, Nguyen Dang; Van Song, Nguyen; Thuan, Tran Duc; Van Tien, Dinh; Van Ha, Thai; Phuong, Nguyen Thi Minh; Huong, Nguyen Thi Xuan; Pham, Thi Lan Phuong

How temperature shocks impact energy poverty in Vietnam: mediating role of financial development and environmental consideration

2022

This paper evaluates the energy poverty of Vietnam by mediating the role of financial development and environmental considerations. Across the globe, billions of individuals live in fuel poverty, failing to access inexpensive and sustainable energy, which is necessary for long-term development. An elevation in power consumption due to an overall increase in heat and short periods of extreme heat exacerbates global warming. The goal of this research is to look at how climate change is affecting energy poverty in Vietnam. This finding (1) demonstrates that temperature shocks have a positive and quantitative impact. (2) The same may be said for “poor income/high cost” figures, which include information on power rates. Similarly, if households use the same amount of power but spend less on other items, the influence will not raise their electricity use. (3) Thermal shocks have been shown to reduce agricultural output in studies. During seasons of low rainfall, for example, higher evaporation and plant water demand can worsen drought and raise total irrigation expenses. Labor productivity is also affected by rising temperatures, particularly in weather-sensitive industries like agriculture. As a result, heat shocks will lower agricultural revenues, worsening energy poverty. Surprisingly, overall income appears to be a little mitigating influence. This might be owing to widespread underreporting of stated income, particularly among persons who rely on agriculture for their livelihood.

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