Energy vulnerability and quality of life in Moldova: an empirical analysis and sustainable transition policy

Abstract

As a small open economy dependent on energy imports, Moldova is particularly vulnerable to crises, as has been evident over the past five years. Energy crises and price shocks have made the population and economy more vulnerable, highlighting the importance of assessing energy vulnerability and its impact on quality of life. This article introduces a new Energy Vulnerability Index (EVI) for Moldova, which considers the country's unique characteristics. This index's practical significance lies in its potential for monitoring government strategies and programmes. The developed index consists of four pillars: structural vulnerability, consumer vulnerability, energy balance vulnerability and inflation vulnerability. The paper's main objective is to prove or disprove the hypothesis that growing energy vulnerability has a statistically significant negative impact on quality of life. Another objective of the study is to evaluate the impact of the government’s policy of partially compensating the population for energy resources consumed. To test this hypothesis, a multiple linear equation was constructed using EViews software. The results confirmed the hypothesis and revealed that unemployment, in addition to energy vulnerability, negatively affects quality of life. The following factors were found to have a positive effect: the share of the urban population, the share of the population with higher education, and government compensation policy. Based on these findings, policy recommendations were developed, focusing on two strategies: strengthening social protection systems and implementing reforms to increase energy efficiency and green energy production