Does income inequality have a heterogeneous effect on carbon emissions between developed and developing countries? Evidence from simultaneous quantile regression

Abstract

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The sustainable development process faces two major challenges: income inequality and carbon emissions. However, there is no definitive conclusion regarding the relationship between income inequality and carbon emissions. In addition, for developed and developing countries, the impact might vary. From an international perspective, the present study examines the correlation between income inequality and carbon emissions utilizing panel data from 65 countries (32 developed and 33 developing countries) spanning from 1990 to 2019. The simultaneous quantile regression (SQR) results show that the impact of income inequality on carbon emissions varies slightly between countries with various income levels. The positive impact of income inequality on carbon emissions is significant for both developed and developing countries, indicating that an uneven income distribution can worsen environmental quality, but the impact is more significant for developed countries. Therefore, it is integral for the global world to take measures to alleviate the income gap to achieve Sustainable Development Goals (SDGs). In addition to income growth, developed countries also need to focus on income equity to reach green development.

Keywords

• income inequality
• carbon emissions
• quantile regression
• developed countries
• developing countries