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Income inequality and CO2 emissions in the G7, 1870–2014: Evidence from non-parametric modelling

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  • Uddin, Md. Main
  • Mishra, Vinod
  • Smyth, Russell

Abstract

We examine whether income inequality effected carbon emissions in what are now the world's wealthiest countries over the period 1870–2014. Employing a non-parametric panel estimation method with cross-sectional and time-varying coefficients, we find that the relationship between income inequality and CO2 emissions is highly non-linear. In terms of signs and significance, the nonparametric coefficient function for income inequality is found to vary over the period 1870–2014. Income inequality exhibits a significant positive effect from 1870 to 1880 and a significant negative impact from 1950 to 2000 on CO2 emissions. We also find that for extended periods between 1881 and 1949 and between 2000 and 2014, there is no significant relationship between the two variables.

Suggested Citation

  • Uddin, Md. Main & Mishra, Vinod & Smyth, Russell, 2020. "Income inequality and CO2 emissions in the G7, 1870–2014: Evidence from non-parametric modelling," Energy Economics, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:eneeco:v:88:y:2020:i:c:s0140988320301201
    DOI: 10.1016/j.eneco.2020.104780
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    More about this item

    Keywords

    Income inequality; CO2 emissions; Non-parametric analysis; G7 countries; Endogeneity;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation

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