Financing the Clean Energy Transition: A Spatial Analysis of Green Finance and Energy Poverty

Green finance seeks to reconcile economic expansion with environmental protection and may, by relaxing financing constraints on clean-energy projects, contribute to lower energy poverty. Using provincial panel data from China over 2010–2019, this study examines the relationship between green finance development and energy poverty and evaluates potential spatial spillovers. The results show that green finance development is negatively associated with energy poverty, and this relationship remains statistically robust in dynamic-panel specifications estimated using system generalized method of moments (system GMM). Mechanism analyses further provide suggestive evidence that this negative association may operate partly through greater energy-supply investment and improved energy-infrastructure conditions. Spatial econometric evidence also indicates the presence of spillover effects: improvements in green finance in one province are associated with lower energy poverty in neighboring provinces. These findings imply that efforts to eradicate energy poverty should explicitly incorporate green finance, recognize regional heterogeneity in green finance development, and improve the transmission of green finance into tangible investment in clean energy and energy infrastructure. Interprovincial policy coordination is also warranted given spatial interdependence.