Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311743 
Year of Publication: 
2025
Series/Report no.: 
LEM Working Paper Series No. 2025/02
Publisher: 
Scuola Superiore Sant'Anna, Laboratory of Economics and Management (LEM), Pisa
Abstract: 
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.
Subjects: 
income inequality
climate change
emissions
carbon
mitigation
JEL: 
C23
D31
Q50
Q54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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