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Income inequality and carbon consumption: evidence from Environmental Engel curves

Lutz Sager

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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: consumption; inequality; pollution; redistribution (search for similar items in EconPapers)
JEL-codes: D12 D31 H23 Q40 Q52 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2020-10-01
New Economics Papers: this item is included in nep-ene, nep-env, nep-hme and nep-reg
References: View references in EconPapers View complete reference list from CitEc
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Published in Energy Economics, 1, October, 2020, 84. ISSN: 0140-9883

Downloads: (external link)
http://eprints.lse.ac.uk/102561/ Open access version. (application/pdf)

Related works:
Journal Article: Income inequality and carbon consumption: Evidence from Environmental Engel curves (2019) Downloads
Working Paper: Income inequality and carbon consumption: evidence from environmental Engel curves (2017) Downloads
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