The Effect of Income Inequality on Renewable Energy Consumption: Evidence from Developing Countries

Document Type : Original Article

Authors

MEHDI MOHAMMADIRAZ ¹

Maryam Shareyfnejad ¹

Mohammad hassan Fotros ²

¹ Department of Economics, Ar.C., Islamic Azad University, Arak, Iran

² Department of Economics, Ha.C., Bu Ali Sina University, Hamedan, Iran

https://doi.org/10.22067/erd.2025.91805.1275

Abstract

The negative externalities due to the extension of the economic production activities, including climate crises caused by fossil fuels and the crisis of exhaustion of reserves of these fuels, have turned attention to the replacement of renewable energy with non-renewable energy sources. So extensive studies in this issues, it was formed to examine the factors affecting the consumption of clean fuels. This paper investigates the effect of income inequality and some other macroeconomic variables on renewable energy consumption in developing countries during 1990 to 2022 using the ARDL-PMG econometric method. According to the results the negative and significant effect of income inequality and the positive and significant effect of gross domestic product on renewable energy consumption were confirmed, which clarifies the need to pay attention to the importance of reducing economic inequality in order to achieve the environmental goals of development. moreover, the effect of trade openness was negative and the effect of real oil price was positive. According to the results of the research, it is recommended that policymakers and economic decision-makers consider the results of this and similar research in their development plans in order to reduce the environmental externality of economic production activities and achieve clean energy, which is the axis of sustainable development.

Keywords

Renewable energy consumption

income inequality

ARDL-PMG approach

Subjects

• economic development

---