Do corruption, income inequality and redistribution hasten transition towards (non)renewable energy economy?

Abstract

This study examines the impact of corruption, income inequality, and redistribution on energy consumption (renewable, nonrenewable, and total) in 166 countries. Panel data and the two-step dynamic system-generalized method of moments techniques are utilised. Our findings show that net (post-tax/transfer Gini index) and market (pre-tax/transfer Gini index) income inequality reduce total energy and renewable energy consumption while increasing nonrenewable energy consumption. The results indicate that income redistribution drives total energy and renewable energy consumption while decreasing nonrenewable energy use. The study highlights that control of corruption increases total energy, renewable, and nonrenewable energy consumption. Moderation and marginal effect analysis suggest that when control of corruption increases, income inequality increases total energy, nonrenewable, and renewable energy consumption. Again, when corruption is effectively controlled, income redistribution increases renewable energy consumption while reducing nonrenewable energy consumption. These findings differ amongst regions. Following these findings, we recommend that policymakers should focus on reducing corruption and addressing income inequality through redistribution policies to accelerate the transition towards a renewable energy economy.