Inequality and the Environment: The Synergy or the Trade-off Effect

The paper studies the relationship between inequality and environment in the case of the NMS of the European Union. We are interested in the sign of the effect in order to see whether there is an effect of synergy or trade-off between the two. We are also interested to analyse the extent of the bias if one analyses the production-based CO2 instead of the consumption-based CO2. The methodology is panel quantile regression, the independent variables introduced were GDP per capita, GINI coefficient, population growth, globalization, technology, renewable energy. With the exception of the GDP per capita and population growth the other variables negatively influence the emissions in almost all quantiles with the exception of 0.9 which has insignificant coefficients. The inequality coefficient is negative suggesting a trade-off effect, a reduce in inequality is increasing pollution, The results showed that analysing production-based CO2 emission results into a smaller elasticity of GDP, creating the impression that the effect of increases in the GDP are smaller than they are. The production-based emission coefficients in absolute value are systematically larger for poverty and renewable energy and smaller in the case of globalization, green innovation and technology.