Migration, Remittances and Clean Fuel Usage in Sri Lanka: The Mediating Role of Household Wealth

The Sustainable Development Goal (SDG) 7 ensures universal access to affordable, reliable, and modern energy services by 2030. However, one-third of the world's population still lacks access to clean cooking fuel, and it will account for 2.3 billion by 2030. The transition from solid to clean, modern fuel is challenging because it is influenced by various factors, with household income being one of the most influential. Nowadays, the overwhelming majority of people in low and middle-income countries heavily rely on migrant remittances as a source of income, and this will have a favourable impact on clean cooking fuel choice. To explore this, we use three waves of Sri Lankan Households' Income and Expenditure Survey data (2009, 2012, and 2016). The results of propensity score matching analysis reveal that migrants use about 5% more clean fuel for cooking than non-migrants. Furthermore, we use the instrumental variable approach and the log of the distance to the nearest bank as the instrument to address the endogeneity of remittances. Accordingly, the control function estimates show that a 10% increase in migrant remittances increases clean cooking fuel use by 3.2%. The instrumental variable mediation analysis results find that household wealth significantly mediates this relationship. The findings suggest that policies encouraging migrant remittances can assist in developing and implementing energy policies to achieve SDG 7 by 2030.