The role of income inequality on consumption-based greenhouse gas emissions under different stages of economic development
2020
Liobikienė, Genovaitė | Rimkuvienė, Daiva
In recent decades, a large number of authors investigated whether income inequality level and climate change were compatible. However, the relationship between inequality level impact and consumption-based greenhouse gas (GHG) emissions was scarcely analysed. Thus, the objective of the present paper was to analyse the relationship between income inequality level and consumption-based GHG emissions from 1990 to 2014 under different stages of economic development. The results revealed a large gap between consumption-based GHG emissions at different economic development stages. Economic growth contributed to the growth of consumption-based GHG emissions in all income groups, and the largest effect was observed in middle-low- and low-income countries. Higher income inequality level was associated with lower negatively influenced consumption-based emissions in high- and middle-high-income countries, confirming the marginal propensity to emit and ‘Veblen effect’ theories. Meanwhile, regarding the middle-low- and low-income groups, the relationships between inequality level and GHG emissions were insignificant. Urbanisation level contributed to the growth of consumption-based GHG emissions in middle- and low-income countries. Education level contributed to the reduction of consumption-based GHG emissions in high-, middle-high-, and middle-low-income countries, and growth of emissions in low-income countries. Therefore, our analysis revealed that income inequality and climate change are still incompatible in all income groups, and we suggested how to achieve the reduction of income inequality and climate change simultaneously.
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