Income inequality and carbon consumption: Evidence from Environmental Engel curves

I investigate the relationship between income inequality and the carbon dioxide (CO2) content of consumption. I quantify the CO2 content of household expenditure using input-output analysis and estimate Environmental Engel curves (EECs) which describe the income-emissions relationship. Using EECs for the United States between 1996 and 2009, I decompose the change in CO2 over time and the distribution of emissions across households. In both cases, income is an important driver of household carbon. Finally, I describe a potential equity-pollution dilemma-progressive income redistribution may raise the demand for aggregate greenhouse gas emissions. I estimate that transfers raise emissions by 5.1% at the margin and by 2.3% under complete redistribution. (C) 2019 Elsevier B.V. All rights reserved.