INCOME INEQUALITY, ENERGY CONSUMPTION AND CARBON DIOXIDE EMISSIONS: PANEL VECTOR AUTOREGRESSION ANALYSIS

Authors : Gülsüm AKARSU

Pages : 325-340

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Publication Date : 2022-12-01

Abstract :Income inequality and climate change have been two major problems calling for solutions. This study analyses the interrelations between energy consumption, carbon emissions and income inequality by using data on Canada, the United States of America, New Zealand, France, and Australia between 1990 and 2014 based on the panel vector autoregression model. Findings indicate bidirectional causal relations between fossil fuels and energy consumption, unidirectional causalities from income inequality to fossil fuels and from carbon emissions to renewables. Impulse-response analysis shows that fossil fuels share, carbon emission, and income inequality respond statistically significantly positively to energy use shock. Fossil fuel shock increases carbon emissions statistically significant. The response of carbon emissions is negative and statistically significant to renewable energy shock. It is essential to decrease energy consumption and increase the share of renewables in total energy consumption to just transition to a low-carbon economy.
Keywords : Income Equality, Climate Change, Energy Usage, Fossil Fuels, Renewable Energy, Panel Data Analysis

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