Urbanization and energy equity: an urban-rural gap perspective

A high-speed urban expansion in China over the past two decades has been accompanied by a great leap forward for energy consumption. However, such a significant socio-economic transition may increase the potential risk of energy inequality, which deserves special attention. Using China's provincial panel data covering the periods of 1997-2020, this paper mainly studies the impact of urbanization on urban-rural electricity consumption inequality with a modified STRIPAT model. The results of the Generalized Method of Moments (GMM) estimation show that there is a significant U-shaped relationship between urbanization and urban-rural electricity consumption inequality. The estimated short-run turning point arrives at the urbanization level of around 63.54% and 61.18% for the long-run estimates. We further carry out a regional heterogeneity analysis and then have two interesting findings: firstly, the colder northern region's turning point (70.95%) arrives later than the south (57.69%). Secondly, the baseline U-shaped relationship remains for developed eastern regions and the estimated turning point is 57.91%, while for the undeveloped midwestern regions, the relationship is not nonlinear but linearly negative. As an extension, we lastly explore the mechanism underlying the U-shaped relationship, and find that the interaction of urbanization's scale and efficiency effect determines the U-shaped relationship. Our findings remind policymakers that, to narrow the urban-rural development gap, the future preference of energy policy should be dynamically adaptive to varied regions and development stages.