Inequalities by energy sources: An assessment of environmental quality

Energy demand is rising day by day, driven mainly by the development of countries. At the same time, uneven economic growth in countries is the prime cause of inequality in energy consumption. Keeping in view the worth of energy in the growth process, this study quantifies the impact of energy inequalities and trade on environmental quality over the period 1995-2018 for 57 countries. The Theil approach is used to quantify inter-and intra-regional disparities in five energy sources; oil, coal, natural gas hydroelectricity, and renewable energy. The results show that North America has the highest oil consumption inequality between the regions while East Asia & Pacific has the highest index value within the regions. Coal consumption inequality is declining in North America, but not in East Asia and the Pacific. Europe & Central Asia, and North America have the highest inequalities in natural gas consumption between the regions. Inequality is shrinking in hydropower consumption between the regions, however, such trend has not loomed within the regions. Europe & Central Asia and East Asia & Pacific have major renewable consumption inequalities within the regions. Generally, there is a decreasing temporal trend in energy consumption inequalities of all energy sources. The GMM technique is applied to investigate the impact of energy inequalities and trade openness on environmental quality. The results reveal that energy inequalities degrade environmental quality. Moreover, trade has a positive impact on environmental quality. However, democratic countries can be advantageous to improve the environmental quality. The study implies that countries should take actions to reduce energy inequalities within and between the regions. Specialization in production through trade can also be an option for improvement in the environment.