Impact of income inequality on CO2 emissions in G20 countries

Over the past three decades, the G20 countries have experienced rapid economic growth but also a widening income disparity and deteriorating environment. We examined whether and how income distribution affects CO2 emissions during economic growth under the extended EKC framework. Using simultaneous quantile regression analysis, we show that, for developing countries, a more equal income distribution favors reductions to the CO2 emissions per capita, whereas, in most developed countries, income inequality hardly affects CO2 emissions. Meanwhile, the EKC hypothesis is valid in G20. Based on the empirical results, we particularly emphasize the importance of reducing income inequality in developing countries and that the entire G20 takes the path of sustainable development.