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Impacts of Income Inequality on CO2 Emission under Different Climate Change Mitigation Policies

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  • Jeong Hwan Bae

    (Chonnam National University)

Abstract

This study empirically examines whether income inequality affects CO2 emission under various climate change mitigation policies. The climate change mitigation policies include carbon tax, emission trading, renewable portfolio standard, feed-in tariff, and renewable fuel standard. The total marginal effect of inequality on CO2 emission is divided into direct, indirect, and interaction effects. Results show that high-income inequality directly raises CO2 emission while indirectly reducing it through its impact on economic growth. Inequality weakens the effectiveness of certain climate change mitigation policies through an interaction effect between inequality and climate change mitigation policies. Whether inequality increases CO2 emission or vice versa cannot be confirmed from the empirical outcomes of total marginal effects of inequality on CO2 emission under different climate change mitigation policies. However, the effectiveness of climate change mitigation policies may be diminished when high inequality exists in a country.

Suggested Citation

  • Jeong Hwan Bae, 2018. "Impacts of Income Inequality on CO2 Emission under Different Climate Change Mitigation Policies," Korean Economic Review, Korean Economic Association, vol. 34, pages 187-211.
    • Handle: RePEc:kea:keappr:ker-20180701-34-2-04
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    Cited by:

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    2. Hyunsoo Kang, 2022. "Impacts of Income Inequality and Economic Growth on CO 2 Emissions: Comparing the Gini Coefficient and the Top Income Share in OECD Countries," Energies, MDPI, vol. 15(19), pages 1-15, September.
    3. Shuyang Chen, 2022. "The inequality impacts of the carbon tax in China," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-10, December.
    4. Li, Jinying & Li, Sisi, 2020. "Energy investment, economic growth and carbon emissions in China—Empirical analysis based on spatial Durbin model," Energy Policy, Elsevier, vol. 140(C).
    5. Yongming Wang & Irfan Uddin & Yingmei Gong, 2021. "Nexus between Natural Resources and Environmental Degradation: Analysing the Role of Income Inequality and Renewable Energy," Sustainability, MDPI, vol. 13(15), pages 1-20, July.
    6. Chen, Shuyang & Wang, Can, 2023. "Inequality impacts of ETS penalties: A case study on the recent Chinese nationwide ETS market," Energy Policy, Elsevier, vol. 173(C).
    7. ALBU Ada-Cristina & ALBU Lucian-Liviu, 2020. "The Impact Of Climate Change On Income Inequality. Evidence From European Union Countries," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 15(3), pages 223-235, December.
    8. Viktor Koval & Olga Laktionova & Iryna Udovychenko & Piotr Olczak & Svitlana Palii & Liudmyla Prystupa, 2022. "Environmental Taxation Assessment on Clean Technologies Reducing Carbon Emissions Cost-Effectively," Sustainability, MDPI, vol. 14(21), pages 1-19, October.

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    More about this item

    Keywords

    Income Inequality; CO2 emission; Economic Growth; Climate Change Mitigation Policies;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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