The Impacts of Income Inequality on China’s Carbon Emissions: A Longitudinal Analysis

Reducing inequalities while boosting economic growth has long been a primary social policy objective for many countries. Human emissions of carbon dioxide, on the other hand, as a chief driver of global warming and other environmental issues, are becoming an increasingly important consideration for governments in formulating sustainable development policies. However, a consensus on the relationship between achieving the two goals has yet to be reached due to the interactive effects of the emission-reduction and income redistribution policies. The purpose of this study is to evaluate the impacts of income inequality on carbon emissions in China. The data of China’s Gini coefficients and the emissions of carbon dioxide from 1981 to 2017 are chosen in this study to indicate the income inequality and carbon emission levels respectively. Correlation analysis and linear regression models are employed to examine the relationship, and the findings suggest a positive correlation between levels of income inequality and carbon emissions in China and that a time lag exists between the two variables. The results are analyzed from both the consumption and production perspectives with particular references to China’s enhancing living standards, improving productivity and technological advances. The findings offer a perspective for understanding the synergy and conflicts between achieving both policy objectives, to preserve the environment while increasing economic welfare for sustainable growth and development of China’s economy.