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Remittance Inflows and Energy Transition of the Residential Sector in Developing Countries

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  • Anil Shrestha

    (Graduate School of Humanities and Social Sciences, Hiroshima University, 1-5-1 Kagamiyama, Higashi-Hiroshima, Hiroshima 739-8529, Japan
    Financial Comptroller General Office, Ministry of Finance, Government of Nepal, Anamnagar, Kathmandu 44600, Nepal)

  • Makoto Kakinaka

    (Faculty of Economics, Ritsumeikan University, 1-1-1 Noji-Higashi, Kusatsu, Shiga 525-8577, Japan
    Network for Education and Research on Peace and Sustainability (NERPS), Hiroshima University, 1-3-1 Kagamiyama, Higashi-Hiroshima, Hiroshima 739-8530, Japan)

Abstract

The energy transition is crucial for the United Nations’ Sustainable Development Goal 7 (affordable and clean energy). As remittances account for a significant share of household incomes in developing countries, they may be associated with the energy transition from low-efficiency residential fuels (e.g., coal and wood) to high-efficiency residential fuels (e.g., gas and electricity). This study examines the association between remittances and residential energy transition in developing countries by employing a pooled mean group autoregressive distributed lag (PMG-ARDL) model for 27 developing nations from 1995 to 2018. The results indicate that a 1% increase in remittances (ratio to GDP) is associated with a 0.24% increase in the share of high-efficiency energy sources in residential energy consumption in the long run.

Suggested Citation

  • Anil Shrestha & Makoto Kakinaka, 2022. "Remittance Inflows and Energy Transition of the Residential Sector in Developing Countries," Sustainability, MDPI, vol. 14(17), pages 1-19, August.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:17:p:10547-:d:896701
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