The nonlinear dependence of income inequality and carbon emissions: Potentials for a sustainable future

Franziska Dorn, Simone Maxand and Thomas Kneib

Ecological Economics, 2024, vol. 216, issue C

Abstract: Understanding the interconnected nature of rising carbon emissions and income inequality is crucial to achieve social and ecological sustainability. We contribute to the literature with a systematic analysis of the conditional interdependence by means of a distributional copula model. The model estimates the nonlinear dependence between a country’s GINI coefficient and CO2 emissions across and within country income groups. This enables us to uncover complex interdependencies that standard linear regression techniques might hide. Using an unbalanced panel data set of 109 countries from 1960 to 2019, composed of different data sets, we show that dependence is related to the prevailing consumption level, energy sources, the structure of the economy and the political system with heterogeneous effects across country income groups. To estimate the potentials for a sustainable future, we define thresholds of potential social and environmental sustainability. We find that richer countries are furthest away from this, but have the highest potential for realizing the defined sustainable space. This further highlights the importance of the service sector and combined policies targeting social and environmental sustainability.

Keywords: Bivariate distributional copula model; Income inequality; Carbon emission; Social sustainability; Ecological sustainability (search for similar items in EconPapers)
JEL-codes: C14 C46 D63 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0921800923002793
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:216:y:2024:i:c:s0921800923002793

DOI: 10.1016/j.ecolecon.2023.108016

Access Statistics for this article

Ecological Economics is currently edited by C. J. Cleveland

More articles in Ecological Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().