Energy poverty and the convergence hypothesis across EU member states

Abstract

Energy poverty is an emerging issue towards global affairs. Currently, the development of energy-related policies is becoming essential, with regard to new societies, social inclusion and social rights. In this paper, we examine the dynamic patterns of energy poverty among 27 EU member states between 2005 and 2020. We use the log-t regression test to investigate the convergence hypothesis, and the P&S data-driven algorithm to detect potential convergence clubs. The empirical results of energy poverty indicators are mixed, and the convergence hypothesis of the states is rejected. Instead, convergence clubs are exhibited, implying that groups of countries converge to different steady states in the long run. In view of the convergence clubs, we suggest that the affordability of heating services is potentially explained by structural conditions of housing, climate conditions and energy costs. Besides, the adverse financial and social conditions for the European households have significantly triggered the arrears on utility bills. Moreover, a significant proportion of households do not have basic sanitation services.