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Income inequality and carbon consumption: Evidence from Environmental Engel curves

Lutz Sager

Energy Economics, 2019, vol. 84, issue S1

Abstract: I investigate the relationship between income inequality and the carbon dioxide (CO2) content of consumption. I quantify the CO2 content of household expenditure using input-output analysis and estimate Environmental Engel curves (EECs) which describe the income–emissions relationship. Using EECs for the United States between 1996 and 2009, I decompose the change in CO2 over time and the distribution of emissions across households. In both cases, income is an important driver of household carbon. Finally, I describe a potential “equity-pollution dilemma”—progressive income redistribution may raise the demand for aggregate greenhouse gas emissions. I estimate that transfers raise emissions by 5.1% at the margin and by 2.3% under complete redistribution.

Keywords: Inequality; Consumption; Pollution; Redistribution (search for similar items in EconPapers)
JEL-codes: D12 D31 H23 Q40 Q52 (search for similar items in EconPapers)
Date: 2019
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Working Paper: Income inequality and carbon consumption: evidence from environmental Engel curves (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:84:y:2019:i:s1:s0140988319302968

DOI: 10.1016/j.eneco.2019.104507

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