Regional energy poverty reevaluated: A direct measurement approach applied to France and Japan

Highlights

• The study applied a new type of energy poverty measure to France and Japan.

• Domestic energy needs and energy poverty rates are greater in France than in Japan.

• Regional energy poverty prevalence reflects circumstantial factors like climate.

• Energy used for heating is crucial in the context of energy poverty and inequality.

• Cross-country comparisons of regions with similar circumstances are useful.

Abstract

In recent years, energy poverty has become an important issue in both developed and developing countries. Although several previous studies have already examined various aspects of energy poverty, there remains an important question with respect to the definitions and indicators that can be relied on to measure energy poverty. A better understanding of the methodological issues regarding the measurement of energy poverty is crucial for the framing and implementation of policies devoted to fighting this phenomenon.

This study applies a new type of measure of energy poverty based on a direct measurement approach in which energy poverty is identified directly based on the actual use of domestic energy services by each household. Using this approach, the study reconsiders the regional aspects of energy poverty both methodologically and empirically, highlighting the pivotal role of climatic and spatial differences in the prevalence of regional energy poverty. The results demonstrate that circumstantial factors such as climate must be taken into account to obtain an accurate picture of energy poverty.

Furthermore, this study provides an international comparison analysis on energy poverty and energy inequality by region in France and Japan. The results clarify that the energy types used for heating, i.e., gas in France and kerosene in Japan, are essential in the context of energy poverty and inequality. Replacing gas and kerosene with low-carbon energy, while guaranteeing people's energy needs, is the key to realizing an inclusive low-carbon energy transition in both countries. This study highlights the significance and usefulness of cross-border comparisons of regions with similar climatic or other circumstantial factors.

Introduction

As the world moves aggressively toward decarbonization, energy or fuel poverty has become an important issue in both developed and developing countries. Energy poverty is now defined as the inability of “a socially and materially necessitated level of domestic energy services” (Bouzarovski and Petrova, 2015, p. 31) or “domestic energy services required to live a decent and healthy life” (Middlemiss and Gillard, 2015, p. 147), and not just the inability of “affordable warmth” (Boardman, 1991, p. 200). In line with the above definitions, the EU Energy Poverty Observatory defines energy poverty as a condition characterized by experiencing inadequate levels of essential energy services such as adequate warmth, cooling, lighting, and the energy to power appliances.¹

The UK government was the first to acknowledge this phenomenon and establish policies to fight it. In fact, the energy poverty concept was born in the UK in the 1970s under the leadership of activist organizations that brought the issue to the attention of authorities and the general population in light of its health consequences, in particular, winter mortality induced by the inability of some households to get an appropriate level of warmth. Awareness of energy poverty is growing rapidly, and in Europe, the issue is being increasingly integrated within the activities of the European Union. It is estimated that more than 50 million households in the EU experienced energy poverty in 2019. Even in other countries outside Europe, such as Australia, China, India, and Japan, there has been a burgeoning interest in the energy poverty issue (Okushima, 2016, Okushima, 2017; Sadath and Acharya, 2017; Poruschi and Ambrey, 2018; Robinson et al., 2018b; Awaworyi Churchill et al., 2020; Awaworyi Churchill and Smyth, 2020; Gupta et al., 2020; Lin and Wang, 2020).

This growing interest in energy poverty is explained by its negative on affected population. In particular, during the last couple of years, a multidisciplinary literature discussed negative impacts of energy poverty on human health and well-being (Liddell and Morris, 2010; Poortinga et al., 2017; Thomson et al., 2017; Bosch et al., 2019; Kahouli, 2020). Such literature argues that energy poverty may increase morbidity rates as well as mortality risk. In fact, cold temperatures are strongly related to cardiovascular and respiratory diseases, and double the risk of respiratory problems, in particular, in the case of children. Cold also increases the risk of infections and minor illnesses such as colds and flu. It also exacerbates existing conditions such as arthritis and rheumatism, and negatively affects mental health by increasing the stress on households. Healy (2003) argues that mortality risk is one of the most extreme health consequences of energy poverty. In the same context, Marmot Review Team (2011) states that energy poverty impairs children's educational attainment, emotional well-being and resilience, reduces dietary opportunities and choices, and increases the risk of accidents and injuries at home. Moreover, it also impedes everyday life work or study and has serious social consequences such as reduction in social interaction and exclusion.

To tackle with these negative consequences of energy poverty, a primary question to answer is how to measure this phenomenon. Identifying households experiencing energy poverty is crucial for the framing and implementation of policies devoted to fighting the phenomenon. Based on an earlier contribution by Isherwood and Hancock (1979), Boardman (1991) suggested the 10% indicator to measure energy poverty, which has since been largely used. It defines a household in energy poverty as one whose energy costs exceed 10% of its income. Since then, a number of studies have proposed different methods from different points of view, but there is still no definitive method. In fact, the 10% indicator, which is now known to have various shortcomings, is still widely used worldwide.²

In this context, there exists an important question as to whether the phenomenon of energy poverty can be assessed using a unidimensional indicator with a uniform criterion (threshold) (Okushima, 2017, Okushima, 2019). Energy poverty research is now widespread worldwide, and circumstantial factors behind the energy poverty phenomenon, including climate, vary from country to country as well as region to region. Adequate consideration of factors that affect people's energy needs is required to obtain a more accurate picture of national or regional energy poverty, although it has often been overlooked in the literature (Bouzarovski and Simcock, 2017; Okushima, 2019).

Against this background, this study makes the following contributions to the energy poverty scholarship. First, the study reconsiders the evaluation of regional energy poverty both methodologically and empirically. Despite the importance of regional differences in energy poverty prevalence and those in circumstantial factors (energy vulnerability factors) such as climate, income, energy infrastructure, and housing types between regions, studies on such spatial aspects are still scarce (Castaño-Rosa and Okushima, 2021). This study aims to fill this gap in the literature.

Second, to achieve this objective, this study introduces a new type of energy poverty measure based on the direct measurement approach developed by Okushima (2019) in which energy poverty is identified directly based on the actual use of domestic energy services by each household. This feature makes this measure different from existing measures such as the 10% indicator, which identifies energy poverty on the basis of the share of energy expenditure in income. The study addresses regional energy poverty issues with this approach, while it can also contribute to the debate on energy (in)efficiency. In fact, energy (in)efficiency is fundamentally related to the energy use. In the measurement of energy poverty, research shows that annual variations in energy poverty rates, which are evaluated by existing (expenditure-type) measures, can be much related to transitory prices variations, rather than a sustainable change like a change in energy efficiency (e.g., Hills, 2011). In this context, the direct measurement approach could be more reliable to identify energy-poor households. As shown below, the approach yields the results different from those by the 10% indicator.

Another feature of the measure is its inclusion of multiple (poverty) thresholds that can reflect a variety of energy vulnerability factors, such as climate or housing type, which determine the risk of falling into energy poverty. This study sets multiple thresholds in line with the typology of households with respect to energy vulnerability factors. It focuses on three energy vulnerability factors: climatic, dwelling (detached or apartment), and socio-demographic (having elderly members or not). In particular, the research argues that addressing climatic differences effectively is vital for the appropriate measurement of energy poverty.

The third contribution is the application of this energy poverty measure within the framework of an international comparative study of France and Japan. Energy poverty is a worldwide problem that is deeply associated with the specific socio-economic or even cultural characteristics of each country. The international community shares the common goal of fighting this problem, but the challenge has just begun. In this context, comparative studies of national experiences would be insightful, and international cooperation can help overcome the problem more efficiently and appropriately. Nevertheless, only a few studies on energy poverty have performed an international comparison analysis. For example, Kyprianou et al. (2019) performed a comparative study of five EU countries: Cyprus, Spain, Portugal, Bulgaria, and Lithuania; Bonatz et al. (2019) analyzed the differences in the characteristics of energy poverty in China and Germany; and Teschner et al. (2020) performed a comparative analysis of a European and a non-European country, i.e., Romania versus Israel.

This study also contributes to the scholarship by providing the first comparative analysis of energy poverty in France and Japan whereas some recent public and private alliances on energy transition between the two countries have been implemented. To the best of our knowledge, this is the first international comparative study of energy poverty in a developed European country and a developed Asian country. Both countries are mature developed countries, now struggling with deep decarbonization efforts in a bid to comply with the Paris Agreement. Both countries are also looking to consolidate their international energy policy cooperation, e.g., on renewables and energy efficiency issues (METI (Ministry of Economy, Trade and Industry), 2019). Moreover, regarding the long-lasting question of the methodology to use to measure energy poverty, the two countries have diverse climates within their national borders, which makes them ideal targets for the application of the direct measurement approach. Despite these commonalities, the political perception of energy poverty is still very different in the two countries. Therefore, Japan, as a latecomer, can be expected to learn a lot from past French experiences to combat energy poverty.

The remainder of this paper is structured as follows. Section 2 reviews the situation on energy poverty in France and Japan. Section 3 presents the details of the methodology used for energy poverty evaluation in this study. Section 4 discusses the results. The final section provides the concluding remarks.