The impact of access to credit on energy efficiency

Abstract

This paper proposes a brand-new measure of energy efficiency at household level and explores how it is affected by access to credit. We calculate the energy and carbon intensity of the related sectors, which experience a substantial decline from 2005 to 2019. Although there is still high inequality in energy use and carbon emissions among Chinese households, the energy efficiency appears to be improved in long run. Our research further maps the relationship between financial market and energy. The results suggest that broadened access to credit encourages households to improve energy efficiency, with higher energy use and carbon emission.