Would narrowing the income gap help mitigate the greenhouse effect? Fresh insights from spatial and mediating effects analysis

Abstract

Fully considering income inequality (ICIE) and its potential environmental effects can help achieve the goal of reducing carbon emissions. Based on this, to effectively explore the nexus between ICIE and carbon dioxide (CO₂) emissions, we first deduce the theoretical framework and then empirically check the spatial impact of ICIE on greenhouse effect based on a global dataset from 1995 to 2016. In addition, this study also conducts the regional heterogeneous analysis and further detects the causal mediating route (i.e., indirect route) between variables. The findings suggest that: (i) Rising ICIE affects CO₂ emissions positively; in other words, narrowing income gap can effectively mitigate greenhouse effect across the globe; (ii) In countries with high gross domestic product (GDP) level, expanded ICIE will exacerbate the greenhouse effect, while in low-GDP countries, ICIE is negatively correlated with CO₂ emissions; and (iii) ICIE can indirectly influence greenhouse effect through substantial economic and technical routes, while the composition route is insignificant. Finally, this paper highlights policy suggestions for carbon reduction by adjusting income distribution, formulating targeted strategies in various countries, and promoting technical innovation.

Keywords

Income inequality / CO₂ emissions / Spatial effect / Mediating effect / Globe analysis

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Funding

National Social Science Foundation of China(20VGQ003)

Natural Science Fund of Hunan Province(2022JJ40647)