Conference Agenda

Could energy transition policies inadvertently lead to adverse effects on households while pursuing sustainable development goals? Using data from the China Household Finance Survey (CHFS), this paper examines the impact of an energy transition policy in China, the New Energy Demonstration City Pilot Program, on household income, paying attention to vulnerable groups particularly. The results show that the policy lead to an average decline of 6.58% in total household income and a 5.04% reduction in income for the head of household. Specifically, the policy decreased individual wage income, household property income, and household transfer income. The latter two are the main contributors to the overall decline in total household income. Mechanism analysis suggests that employment structure adjustments, rising energy costs, and inadequate compensation mechanisms are the key transmission channels. Heterogeneity analysis demonstrates that energy transition has a stronger negative impact on the incomes of low-income households, low-asset families, employed individuals, and those with lower levels of education. Welfare analysis further reveals that the policy has a significantly stronger inhibitory effect on developmental consumption than on subsistence consumption, resulting in long-term welfare losses for households.