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Does energy transition reduce carbon inequality? A global analysis

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Abstract

Energy transition from fossil fuels to renewables is instrumental in mitigating climate change. Low-income countries have a higher share of renewable energy in their total energy consumption than rich countries (WDI, 2023). Thus, it is imperative to examine the role of energy transition in affecting relative CO2 emissions between rich and poor sections of the societies across income groups of the countries. In this context, our study contributes by constructing the carbon inequality models with renewable and non-renewable energy consumption as prime explanatory variables separately for 114 countries over a data period 1990–2019. The models are estimated individually for high-middle-low-income countries by controlling for foreign direct investment (FDI), economic growth, and innovations. Starting with preliminary econometric operations, we employ the dynamic simulated panel autoregressive distributed lag approach and Driscoll-Kraay standard error regression for empirical investigation. We find that energy transition reduces carbon inequality globally. Innovation has a negative impact, economic growth has a positive impact on carbon inequality, and FDI has an asymmetric impact based on the income level of the countries. The crucial global policy implications are discussed.

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Fig. 1

Source: Authors’ estimation

Fig. 2

Source: Authors’ estimation

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Data Availability

Data sources are given. Data used in the analysis can be made available upon request.

Notes

  1. More specifically, on account of availability of carbon inequality data till the year 2019 from 1990, our analysis is restricted to focus on for the period 1990–2019.

  2. The equations have a semi-logarithmic form (i.e., lnREN, lnINO, and lnGDP). Due to the negative and minimum values, as well as lower mean and standard deviation values, FDI is not in logarithm form.

  3. For example, the Russian-Ukraine war has disrupted the global energy market. This was due the sanctions imposed on Russia as a part retaliation, supply chain disruption in international energy market, etc.

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Authors and Affiliations

  1. School of Business and Management, CHRIST (Deemed to Be University), Bengaluru, 560029, Karnataka, India

    Gupteswar Patel & Shreya Pal

  2. Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, Kharagpur, West Bengal, 721302, India

    Anjan Kumar Sahu

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  1. Gupteswar Patel
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  2. Shreya Pal
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  3. Anjan Kumar Sahu
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Contributions

All authors contributed to the study conception and design. Material preparation, data collection, and analysis were performed by Shreya Pal. Literature review is done by Anjan Kumar Sahu. Theoretical analysis and the first draft of the manuscript were written by Gupteswar Patel, and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

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Correspondence to Gupteswar Patel.

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Patel, G., Pal, S. & Sahu, A.K. Does energy transition reduce carbon inequality? A global analysis. Environ Sci Pollut Res 31, 34689–34708 (2024). https://doi.org/10.1007/s11356-024-33542-0

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