Is income inequality a stumbling block to the global natural gas market?

Abstract

The potential effect of narrowing income gap on natural gas use in the global dimension has not received much attention; thus, the main research topic of this paper is whether the realization of common prosperity has a significant nonlinear impact on natural gas. To explore this topic, this study first systematically analyzes the theoretical framework in the inequality-gas nexus, and then examines the role of narrowing income gap in influencing gas use based on a global sample dataset. We also explore the asymmetric impacts of income inequality and other influencing factors on gas use. The primary findings suggest that: (i) both income inequality and global gas use show an inverted U-shaped nexus; by implication, as the income gap widens, the global gas use expands, and the use of gas gradually decreases when the income gap peaks. This has been checked by a series of robustness tests. Moreover, we find that (ii) asymmetric impacts of income inequality on global gas use exist in different natural gas conditions. Therefore, some policy suggestions to narrow the income gap, rationalize income distribution, and formulate strategies according to local conditions are proposed.