Revisiting the link between income inequality and emissions

The present study aims to shed light on the relationship between income inequality and greenhouse gas emissions by analyzing how income inequality affects carbon dioxide emissions and the emissions-income relationship. Since the literature on the impact of income and income inequality on emissions is still inconclusive, this paper offers further insights on how the effects of income and income inequality on emissions vary in countries with different income levels. The estimations are based on an unbalanced panel dataset that includes annual values for the industry structure, the share of the urban population, civil liberties and political freedom, globalization, and education covering 177 countries from 1990 to 2018. The paper finds evidence for a generally negative impact of income inequality on emissions patterns that turns positive for countries above a certain threshold of GDP per capita, which has not been reached by all high-income countries. Moreover, the results support the relationship proposed by the EKC only in richer countries.