More green digital finance with less energy poverty? The key role of climate risk

The emerging field of green digital finance (GDF) holds promise for alleviating energy poverty (EP); however, its potential remains underexplored. Constructing a multidimensional index of GDF, this study investigates whether and how GDF development contributes to EP mitigation. Employing provincial-level panel data from China, our findings indicate that GDF development significantly reduces EP, and enhancing energy efficiency and deepening digitalization are potential mechanisms in this process. Moreover, climate risk demonstrates moderating/threshold effects, with an unfavorable role in addressing EP. Specifically, GDF exhibits a propensity to decrease EP at lower levels of climate risk, with the opposite effect observed at higher levels of risk. These findings offer essential guidance for policymakers to alleviate EP and promote sustainable development . • We study whether and how green digital finance (GDF) affects energy poverty. • The role of climate risk is considered when assessing their relationship. • Results show that GDF does significantly reduce energy poverty (EP). • Such effects are heterogenous under different socioeconomic conditions. • Climate risk plays unfavorable moderating/threshold effects in addressing EP.