How does income inequality affect energy efficiency? Empirical evidence from 33 Belt and Road Initiative countries

Abstract

At present, income distribution and environmental pollution are serious issues faced by the Belt and Road Initiative (BRI) countries, and exploring the impact of income inequality on energy efficiency is meaningful for the sustainability of BRI countries. Using the panel data of 33 BRI countries from 2000 to 2016, we first evaluate the energy efficiency of the countries by dynamic DEA model, and then adopt the Tobit regression model to investigate the nonlinear effect of income inequality on energy efficiency. The results suggest that, first, during 2000–2016, the overall energy efficiency of 33 BRI countries is relatively low, falling to 0.38, while the overall energy efficiency of high-income BRI countries is much higher than that of the middle-and low-income BRI countries. Second, the average energy efficiency of the BRI countries has declined since year 2013. Third, there is an inverted “U”-type effect of income inequality on energy efficiency in the whole sample, but the impact of income inequality on energy efficiency is heterogeneous for countries at different income levels. Specifically, in high-income BRI countries, income inequality shows a “U”-type effect on energy efficiency, while in middle-and low-income BRI countries, the relationship between income inequality and energy efficiency is an inverted “U”-type. Moreover, economic growth positively impacts the energy efficiency, while industrialization and energy structure negatively influence the energy efficiency.