Countries investing in renewable energy have greater economic growth.
That is the verdict of a new study from the University of Sussex Business School and the University of Portsmouth.
The authors analysed the data of more than 200 countries between 2000-2019, finding that renewable energy helps reduce income inequality and energy poverty. The study revealed that in countries where renewable energy is close to half of total energy consumption, income inequality reduces by 0.2% for every additional 1% increase in renewable consumption.
It also suggested that the economic growth of a country must reach a threshold before it begins to kickstart a rise in renewable consumption and a fall in fossil fuels – on average this was $17,000 (£12,300) per capita.
The authors have called on policymakers worldwide to promote renewable energy to drive equal and balanced economic growth.
Dr Panagiotis Tzouvanas, Lecturer in Finance at the University of Sussex Business School, said: “The positive relationship between economic growth and renewable energy is endogenous.
“The more you invest in renewable energy, the higher the economic growth. In turn, the higher the economic growth, the more renewable energy consumption. The challenge is to reach a sufficient level of economic development to initiate this win-win cycle.”