Do tariff reductions alleviate energy poverty? Evidence for Sub-Saharan African countries

Abstract

Energy poverty is a topical issue in developing countries and its alleviation is one of the United Nations’ Sustainable Development Goals (SDG7). In this paper, we analyze the impact of trade liberalization measured by tariff rate reductions on energy poverty as determined by access to clean fuels and modern technologies for cooking. We use panel data of 20 Sub-Saharan African countries from 2000 to 2020, a dynamic ordinary least squares (DOLS) estimator, a fully modified ordinary least squares (FMOLS) and a canonical correlation regression (CCR) to capture the long-running relationship. We found that tariffs rate reductions are associated with an increase in access to clean fuels and modern technologies for cooking, which in the long-run helps to alleviate energy poverty. Our empirical findings are robust according to several tests, including adding alternative control variables, alternative energy poverty measure, and alternative empirical methods. Our analysis also highlights that renewable energy consumption, remittances and institutional quality help alleviate energy poverty.