ECONOMIC BARRIERS TO GREEN ENERGY: ADDRESSING POVERTY, INEQUALITY AND SUSTAINABILITY

Abstract

Renewable energy as one of the solutions to environmental degradation, income inequality, and poverty are essential in the global challenge. This paper examines the connection between consumption of renewable energy and socio-economic factors, like income inequality and poverty, with economic growth, fintech and technology diffusion as control variables. Employing data on 126 countries within 2001 to 2022, the panel econometric analysis to determine the dynamics of renewable energy adoption was carried out using the robust panel econometric methods, such as the System GMM approach and the Driscoll-Kraay regression. The results indicate that the reduction of renewable energy consumption is highly connected to poverty with a coefficient of    -0.0329 but there is no statistically significant impact on income inequality. The values of negative coefficient of -0.1152 and -0.1222 indicate economic growth and fintech have a negative influence on renewable energy consumption. Technology diffusion on the other hand has a positive but statistically insignificant relationship. These findings emphasize the need to use specific measures to reduce poverty, coordinate the development of fintech with the objectives of green energy, and promote fair energy transitions. The study contributes to the discourse on sustainable development by presenting practical insights that policymakers can use in their quest to facilitate the use of renewable energy in various socio-economic contexts.

Keywords: Income inequality, renewable consumption, poverty, System GMM method, Driscoll-Kraay regression