2025/04 | LEM Working Paper Series | |
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The emission-inequality nexus across stages of development |
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Francesco Lamperti, Elisa Palagi and Tommaso Perniola |
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Keywords | ||
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income inequality, climate change, emissions, carbon, mitigation
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JEL Classifications | ||
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C23, D31, Q50, Q54
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Abstract | ||
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Does a more unequal society emit more CO2? The nexus between carbon
emissions and income inequality has been at the core of a vast
literature, which has yielded conflicting results. Leveraging panel
econometric techniques, we provide robust evidence of a non-linear
relationship that depends on the structural composition of the
economy. Specifically, we document a positive association between
income inequality, measured with five different indicators, and per
capita carbon emissions in highly tertiarized countries. In contrast,
the relationship in non-service-intensive economies turns negative. We
provide evidence for plausible mechanisms mediating this non-linear
association: the carbon footprint of the richest
individuals -particularly when linked to investment- and the employment
share in industry are key factors underlying the observed
patterns. Our results point to the stage of "development" as a crucial
factor shaping the emission-inequality nexus. Indeed, it helps
identify countries for which fighting inequality comes with
climate-related benefits.
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