Can Clean Energy Projects Help the Poor? Evidence from the PV Projects in China

Abstract

The objective of this paper is therefore to capture to which extent clean energy project have led to poverty alleviation, based on solar photovoltaic (PV) projects data for years 2015 (pre-PV) and 2019 (post-PV) for rural counties in China. Complementary to existing studies, we explore the influence of PV projects on sustainable development benefits for rural and further introduce the projects designation event into the model to analyze the long-run effects across host counties. Through the difference-in-differences (DID) approach by adopting the propensity score matching (PSM), the results show that with the promotion of PV projects, although the total income of rural residents has somewhat rose, growing income inequality coincides with the significant differences in benefits among groups. For poverty-stricken block group the economic benefits are relatively smaller while the negative effects on income equality are less explicit than those for the other groups. Moreover, a substantial increase in income is evident during the periods before the implementation of PV projects. Meanwhile, the growing income gap is long-run and appears only after projects have been carried out. Foreseeably, the promotion of PV projects may be a potential challenge to address relative poverty.