Assessing the Role of Green Finance and Education as New Determinants to Mitigate Energy Poverty

Energy poverty (EP) is a problem that affects developed and developing economies, and its mitigation is of great significance to social welfare. EP affects Latin American countries, and policymakers have recently attempted to address this issue, particularly in the aftermath of the recent economic crisis. It is essential to measure and evaluate EP to implement strategies and policies effectively. Using a panel quantile regression approach, we investigate the heterogeneous impact of green finance, renewable energy (RE), and energy efficiency (EE) on EP for 33 Latin American countries from 2000 to 2018. Furthermore, certain associated control variables are incorporated into our model to avoid an omitted variable bias. According to empirical results, the impact of independent variables on EP is heterogeneous. Specifically, green finance is an essential source of alleviating EP, and it has a significant positive effect across all quantiles, but it is especially strong in the middle quantiles. RE and EE significantly mitigate EP, with the strongest effects occurring at higher quantiles. By including green finance, RE, and EE as the main explanatory determinants of EP, the findings urge policymakers in Latin American countries to design a comprehensive energy conservation policy to minimize the effects of massive EP.