Title: Revisiting the relationship between income inequality and CO₂ emissions in the USA: new evidence from CS-ARDL model

Authors: Oguzhan Batmaz; Ferhat Çıtak; Muhammad Abdul Kamal

Addresses: Colorado College, Colorado Springs, CO, USA ' School of Economics and Administrative Sciences, Hitit University, Turkey ' Department of Economics, Abdul Wali Khan University, Mardan, Pakistan

Abstract: Both theoretically and empirically, the association between income inequality and CO₂ emissions is ambiguous. Hence, considering the short- and long-term dynamics of income inequality on carbon emissions, as well as the heterogeneity of the emission distribution, this paper employed cross-sectional autoregressive distributed lag (CS-ARDL) approach over the period 1990-2018 and extended revisiting the effect of income inequality on carbon emissions across US states by considering human development index. The study finds that higher income inequality tends to exacerbate US carbon emissions in the long term. Additionally, the study validates the EKC hypothesis by demonstrating that carbon emissions rise with lower income levels and diminish with higher income levels. Population growth leads to increased carbon emissions in the short and long term, while human development index has a negative impact on carbon emissions in the short run. The findings are vigorous to various causality tests. Policy recommendations are further discussed.

Keywords: income inequality; carbon emissions; the US states; CS-ARDL; USA.

DOI: 10.1504/IJGW.2023.130494

International Journal of Global Warming, 2023 Vol.30 No.1, pp.81 - 102

Received: 29 Mar 2022
Received in revised form: 25 Aug 2022
Accepted: 06 Sep 2022
Published online: 24 Apr 2023 *