Energy poverty and the green energy transition's impact upon income inequality in Latin America

Abstract

In this study, we examine the relationships arising from the transition process to green economies and energy poverty in relation to income inequality across 22 Latin American countries during the period from 2000 to 2021. Our estimations are conducted using various estimators for energy poverty and the transition to green economies, employing feasible generalized least squares (FGLS) and panel corrected standard errors (PCSE) to ensure robustness. The results reveal a significant effect of both sets of variables on income inequality. Specifically, energy poverty contributes to higher levels of income inequality, while the ecological transition has the potential to address income inequality issues, provided an effective distribution of renewable energy resources among society is ensured. Failure to achieve equitable distribution of renewable energy resources may hinder the attainment of more egalitarian societies. To address this, a comprehensive set of policies is required to ensure equal access to renewable energy sources for the entire population, along with effective long-term measures that contribute to the equitable distribution of energy resources.