Energy poverty occurs when households are unable to access essential energy services and is becoming an increasing concern for EU policymakers that produced, among others, the Commission Recommendation on energy poverty ((EU) 2020/1563) specifically focused on providing guidance on adequate indicators to measure and monitor energy poverty.
Energy poverty, affecting many European households, is related to multiple vulnerability factors such as high energy prices, low household income, inefficient buildings as well as reinforced EU commitment toward ambitious climate targets.
The increasing relevance of energy poverty within EU policies calls for the development of adequate indicators and other tools to monitor the evolution of the phenomenon as well as improve policy targeting for households at risk.
The fiscal policy unit supports such effort by incorporating energy poverty indicators in our EUROMOD model. This allows us to perform cross-country analysis of the main energy poverty indicators used for policy monitoring. The extensive coverage of our matched dataset let us examine the effectiveness of indicators in capturing households at risk of energy poverty as well as the potential overlap among the indicators. Moreover, our analysis let us explore further into determinants of energy poverty and improve understanding of vulnerability factors that put households at risk of energy poverty. The final aim is to improve the policy targeting and ex-ante evaluation of public policies using our EUROMOD and its Indirect Tax Tool (ITT).