A spatial–temporal analysis of income inequality and wind energy development in the U.S.

Abstract

This study addressed the distributional challenges associated with renewable energy development. In the U.S., wind energy has become the most prevalent renewable energy source, offering significant advantages in decarbonization, economic growth, and access to affordable clean energy. However, concerns emerged regarding the distributional consequences of wind energy development. This study aimed to empirically examine (i) the impact of wind energy projects on income inequality and (ii) any significant trends in this impact from a spatial–temporal perspective. To achieve this, we constructed a new variable to measure wind energy development at the U.S. county level across four periods (2010, 2013, 2016, and 2019). To address potential endogeneity, we employed Instrumental Variable Two-Stage Least Squares (IV-2SLS) regression with three geophysical variables on wind resource capacity. After combining the data collected from the American Community Survey (ACS), our analysis revealed that wind energy development had a consistently positive and significant impact on income inequality. However, the effect diminished in magnitude over time as wind energy projects expanded, indicating an optimistic outlook for renewable energy development. In light of these findings, we discussed potential mechanisms for the positive effect, such as employment, land lease payment, and tax revenue, and their policy implications.

Keywords

• Wind energy
• Renewable energy
• Income inequality
• Gini coefficient
• Distributional impacts
• Instrumental variables