Does structural transformation in economy impact inequality in renewable energy productivity? Implications for sustainable development

Abstract

Since the global economies are in pursuit of achieving the 2030 Sustainable Development Goals (SDG) agenda, it has become pertinent to undergo an energy transition and enhance energy use efficiency in tandem. This is creating a disparity in the renewable energy generation, which is arising out the structural transformation of the economies. Against this background this study aims to assess the impacts of structural transformation on inequality in renewable energy productivity across selected OECD countries between 1990 and 2019. This study is important from the perspective that due to inequitable economic growth trajectory attained by the OECD nations, the renewable energy consumption levels of the OECD nations display significant amount of disparity which can also be reflected in terms of unequal distribution of renewable energy productivity across these countries. Besides, since the OECD countries are gradually transforming their economies from being agriculture-oriented to service-oriented and are becoming more focused on energy innovation and energy efficiency aspects, it can be hypothesized that this structural transformation might reduce the inequality in renewable energy productivity among these nations. Using second-generation methods and dynamic elasticity analysis, this study finds that structural transformation helps to reduce the inequality in renewable energy productivity. Besides, technological innovation is also evidenced to exert inequality-reduction effects. In contrast, conflicts and economic conflicts are evidenced to generated adverse effects on inequality in renewable energy productivity within the OECD countries. Furthermore, the outcomes from this study have also identified the policy interventions responsible for the aggravation of inequality in renewable energy productivity. Based on these findings, a policy framework has been provided to help the OECD countries to attain the objectives of SDG 7 and SDG13