Toward sustainable solutions: green energy poverty, energy justice, and environmental degradation in Ethiopia with moderating effects and countershock simulations

The unexplored green energy poverty–environmental degradation nexus in Ethiopia hampers understanding of its environmental impacts and obstructs pathways toward a just and sustainable energy transition. Moreover, the moderating role of energy justice remains inadequately examined, creating critical policy gaps. This study investigates the impacts of green energy poverty and energy justice on environmental degradation, probes energy justice’s moderating role, tests the empirical validity of the STIRPARTY model, and predicts countershocks using ARDL and novel dynamic ARDL simulations on quarterly data from 2000Q1 to 2020Q4. Building on the “stochastic impacts by regression on population, affluence, regulation, and technology” (STIRPART) model, the study proposes an extended STIRPARTY framework by incorporating nonlinearity (Y) to better capture complex interactions. Findings reveal that green energy poverty significantly increases environmental degradation, while energy justice mitigates this impact in both the short and long term. Energy justice strongly moderates green energy poverty, reducing its effect on environmental harm. Simulation analysis based on a 36% change in green energy poverty shows substantial long-term effects, but energy justice helps reduce the environmental burden. The study also finds that emission reductions achieved by lowering green energy poverty may not be fully sustained over time. Environmental degradation increases with green energy poverty but at a diminishing rate until a threshold is reached. Policy implications include developing an energy justice framework for equitable, affordable, and sustainable access; bridging urban–rural energy gaps through renewables; creating public–private partnerships for co-financing, technical support, and local joint management; implementing sector-wide energy efficiency programs; forecasting environmental countershocks; and enforcing sustainable land-use policies.