The relationship between income inequality and renewable energy consumption: A dynamic panel data analysis for G-20 countries

Renewable energy (RE) represents a global transformation process with economic and environmental impacts, and countries are taking strategic steps to progress in this area. Income inequality is considered to play a critical role in this process. This study aims to determine the impact of income inequality on RE consumption (REC). The research covers data from 19 G20 member countries from 2001 to 2020. The empirical evidence obtained in the study is based on the two-step generalized method of moments (GMM) estimator derived by Arellano-Bond. Five variables are used in the study. These are REC, carbon dioxide (〖"CO" 〗_2 ")" emissions, trade openness, Gross Domestic Product (GDP) per capita, and the Gini index (GINI). This research shows that increasing income inequality in G20 countries hurts REC. However, according to the findings, the lagged impact of income inequality is significant. In addition, the effect of other variables (〖"CO" 〗_2 emissions, trade openness, and GDP per capita) discussed in the study on REC is harmful and significant. In conclusion, the findings from the example of G20 countries provide evidence that an increase in income inequality has a lagged negative impact on REC and suggest that policymakers should consider income redistribution measures to promote REC.