The role of ethnic diversity in sustainable environmental growth: new evidence across different income regions

We examine the relationship between ethnic diversity and environmental quality, proxied by carbon dioxide (CO2) emissions. Ethnic diversity is captured using indices of ethnic fractionalization. Adopting a supply-demand framework which introduces a model for economic growth, we find that ethnic fractionalization reduces emissions. The negative effect of ethnic diversity on emissions is also consistent across middle and low-income countries as well as high-income countries. However, results suggest that ethnic diversity has a negative effect on growth in middle and low-income countries, but a positive effect on growth in high-income countries. Our findings prove robust to alternative estimation methods.