Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

The revised approaches to income inequality impact on production-based and consumption-based carbon dioxide emissions: literature review

  • 35 Accesses


In recent decades, many authors have investigated possibility of simultaneous reduction of income inequality and pollution related to climate change. However, none of the previous researches reviewed the empirical studies of relationship between inequality and CO2 emissions. The authors of the selected papers, published from 2001 to 2019, found a diverse impact of income inequality on carbon dioxide (CO2) emissions. It could depend on different trajectories of Kuznets curves. Furthermore, the majority of authors have provided theoretical analysis (even including human behaviour) of the influence of income inequality on CO2 emissions, considering only territorial (or production-based) emissions. However, this paper recommends to distinguish between the production-based and consumption-based emissions and suggests the revised approaches to the impact of income inequality on CO2 emissions with regard to the production-based and consumption-based emissions. Regarding the production-based emissions, the following approaches are proposed: (i) determination of environmental policies, which also could reveal and explain the leakage phenomenon, and the channels of EKC, i.e. (ii) scale, (iii) composition, (iv) technical and (v) globalization effects. The influence of income inequality on consumption-based emissions can be explained by applying two approaches, namely (i) inequality determined changes in working time (this approach is also related to “Veblen effect”) and (ii) individual economic behaviours of households. Therefore, the present study provides a new insight into the subject of the relationship between income inequality and pollution related to climate change.

This is a preview of subscription content, log in to check access.

Fig. 1
Fig. 2
Fig. 3


  1. Ali HS, Hassan S, Kofarmata YI (2016) Dynamic impact of income inequality on carbon dioxide emissions in Africa: new evidence from heterogeneous panel data analysis. Int J Energy Econ Policy 6(4):760–766

  2. Azam M, Khan AQ (2016) Testing the environmental Kuznets curve hypothesis: a comparative empirical study for low, lower middle, upper middle and high income countries. Renew Sustain Energ Rev 63:556–567. https://doi.org/10.1016/j.rser.2016.05.052

  3. Baek J, Gweisah G (2013) Does income inequality harm the environment? Empirical evidence from the United States. Energy Policy 62:1434–1437. https://doi.org/10.1016/j.enpol.2013.07.097

  4. Baker L (2018) Of embodied emissions and inequality: rethinking energy consumption. Energy Res Soc Sci 36:52–60. https://doi.org/10.1016/j.erss.2017.09.027

  5. Baloch A, Shah SZ, Noor ZM, Magsi HB (2018) The nexus between income inequality, economic growth and environmental degradation in Pakistan. Geo Journal 83:207–222. https://doi.org/10.1007/s10708-016-9766-3

  6. Barro RJ (2000) Inequality and growth in a panel of countries. J Econ Growth 5(1):5–32. https://doi.org/10.1023/A:1009850119329

  7. Berthe A, Elie L (2015) Mechanisms explaining the impact of economic inequality on environmental deterioration. Ecol Econ 116:191–200. https://doi.org/10.1016/j.ecolecon.2015.04.026

  8. Bilgili F, Kocak E, Bulut U (2016) The dynamic impact of renewable energy consumption on CO2 emissions: a revised environmental Kuznets curve approach. Renew Sustain Energ Rev 54:838–845. https://doi.org/10.1016/j.rser.2015.10.080

  9. Bimonte S (2002) Information access, income distribution, and the environmental Kuznets curve. Ecol Econ 41(1):145–156. https://doi.org/10.1016/S0921-8009(02)00022-8

  10. Böhriger C, Rutherfod TF (2013) Transition toward a low carbon economy: a computable general equilibrium analysis for Poland. Energy Policy 55:16–26. https://doi.org/10.1016/j.enpol.2012.11.056

  11. Borghesi S (2006) Income inequality and the environmental Kuznets curve. Environment, Inequality and Collective Action 33

  12. Bowles S, Park Y (2005) Emulation, inequality, and work hours: was Thorsten Veblen right? Econ J 115(507):F397–F412. https://doi.org/10.1111/j.1468-0297.2005.01042.x

  13. Boyce JK (1994) Inequality as a cause of environmental degradation. Ecol Econ 11:169–178. https://doi.org/10.1016/0921-8009(94)90198-8

  14. Boyce JK (2007) Is inequality bad for the environment? Working paper no. 135. Political Economy Research Institute. University of Massachussets, Amherst

  15. Carvalho TS, Santiago FS, Perobelli FS (2013) International trade and emissions: the case of the Minas Gerais state-2005. Energ Econ 40:383–395. https://doi.org/10.1016/j.eneco.2013.07.002

  16. Castells-Quintana D, Ramos R, Royuela V (2013) Income inequality in European regions: recent trends and determinants AQR-IREA Research Group. University of Barcelona, Barcelona

  17. Celik S, Basdas U (2010) How does globalization a_ect income inequality? A panel data analysis. Int Adn Econ Res 16(4):358–370. https://doi.org/10.1007/s11294-010-9281-0

  18. Chancel L, Hough A, Voituriez T (2018) Reducing inequalities within countries: assessing the potential of the sustainable development goals. Global Policy 9(1):5–16. https://doi.org/10.1111/1758-5899.12511

  19. Charfeddine L, Mrabet Z (2017) The impact of economic development and socialpolitical factors on ecological footprint: a panel data analysis for 15 MENA countries. Renew Sust Energ Rev 76:138–154. https://doi.org/10.1016/j.rser.2017.03.031

  20. Chow GC, Li J (2014) Environmental Kuznets curve: conclusive econometric evidence for CO2. Pacific Econ Rev 19(1):1–7. https://doi.org/10.1111/1468-0106.12048

  21. Dinda S (2004) Environmental Kuznets curve hypothesis: a survey. Ecol Econ 49:431–455. https://doi.org/10.1016/j.ecolecon.2004.02.011

  22. Downey L (2015) Inequality, democracy, and the environment. NYU Press, New York

  23. Dreher A, Gaston N (2008) Has globalization increased inequality? Rev Int Econ 16(3):516–536. https://doi.org/10.1111/j.1467-9396.2008.00743.x

  24. Ertugrul HM, Cetin M, Seker F, Dogan E (2016) The impact of trade openness on global carbon dioxide emissions: evidence from the top ten emitters among developing countries. Ecol Indic 67:543–555. https://doi.org/10.1016/j.ecolind.2016.03.027

  25. Farhani S, Shahbaz M (2014) What role of renewable and non-renewable electricity consumption and output is needed to initially mitigate CO2emissions in MENA region? Renew Sustain Energ Rev 40:80–90. https://doi.org/10.1016/j.rser.2014.07.170

  26. Fitzgerald J, Jorgenson A, Clark B (2015) Energy consumption and working hours: a longitudinal study of developed and developing nations, 1990-2008. Environmental Sociology 1(3):213–223. https://doi.org/10.1080/23251042.2015.1046584

  27. Fitzgerald J, Schor J, Jorgenson A (2018) Working hours and carbon dioxide emissions in the United States, 2007-2013. Social Forces 96(1):1851–1874. https://doi.org/10.1093/sf/soy014

  28. Franzen A, Vogl D (2013) Acquiescence and the willingness to pay for environmental protection: a comparison of the ISSP, WVS, and EVS. Soc Sci Q 94:637–659. https://doi.org/10.1111/j.1540-6237.2012.00903.x

  29. Gangadharan L, Valenzuela M (2001) Interrelationships between income, health and the environment: extending the environmental Kuznets curve hypothesis. Ecol Econ 3:513–531. https://doi.org/10.1016/S0921-8009(00)00250-0

  30. Gassebner M, Gaston N, Lamla MJ (2008) Relief for the environment? The importance of an increasingly unimportant industrial sector. Econ Inq 46:160–178. https://doi.org/10.1111/j.1465-7295.2007.00086.x

  31. Golley J, Meng X (2012) Income inequality and carbon dioxide emissions: the case of Chinese urban households. Energ Econ 34(6):1864–1872. https://doi.org/10.1016/j.eneco.2012.07.025

  32. Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110:353–377. https://doi.org/10.3386/w4634

  33. Grunewald N, Harteisen M, Lay J, Minx J, Renner S. (2012) The Carbon Footprint of Indian Households. Paper presented at the IARIW Boston

  34. Grunewald N, Klasen S, Martínez-Zarzoso I, Muris C (2017) The trade-off between income inequality and carbon dioxide emissions. Ecol Econ 142:249–256. https://doi.org/10.1016/j.ecolecon.2017.06.034

  35. Hao Y, Chen H, Zhang Q (2016) Will income inequality affect environmental quality? Analysis based on China’s provincial panel data. Ecol Indic 67(8):533–542. https://doi.org/10.1016/j.ecolind.2016.03.025

  36. He Y, Feng WA (2019) Study on the determinants of income distribution: evidence from macroeconomics. Journal of Distribution Science 17(1):21–31. https://doi.org/10.15722/jds.17.1.201901.21

  37. Heerink N, Mulatu A, Bulte E (2001) Income inequality and the environment: aggregation bias in environmental Kuznets curves. Ecol Econ 38:359–367. https://doi.org/10.1016/S0921-8009(01)00171-9

  38. Hourcade JC (2013) Killing the carbon tax with the equity argument: lessons from the Sarkozy tax. In: Genevey R, Pachauri RK, Tubiana L (eds) Reducing inequalities: a sustainable development challenge. Teri Press, New Delhi, pp 157–168

  39. Hubacek K, Baiocchi G, Feng K, Munoz Castillo R, Sun L, Xue J (2017) Global carbon inequality. Energ Ecol and Environ 2(6):361–369. https://doi.org/10.1007/s40974-017-0072-9

  40. Hübler M (2017) The inequality-emissions nexus in the context of trade and development: a quantile regression approach. Ecol Econ 134:174–185. https://doi.org/10.1016/j.ecolecon.2016.12.015

  41. Ibrahim MH, Law SH (2014) Social capital and CO2 emission output relations: a panel analysis. Renew Sustain Energ Rev 29(C):528–534. https://doi.org/10.1016/j.rser.2013.08.076

  42. Ines SDM (2011) Globalization and income inequality in Brazil. Aarhus School of Business, Aarhus University, Master of Science in International Business

  43. Islam SN (2015) Inequality and Environmental Sustainability 2015. United Nations, Department of Economic and Social Affairs. DESA Working Paper No. 145,ST/ ESA/2015/DWP/145. [http://www.un.org/esa/desa/papers/2015/wp145_2015.pdf]

  44. Jakob M, Steckel JC, Klasen S, Lay J, Grunewald N, Martinez-Zarzoso I, Renner S, Edenhofer O (2014) Feasible mitigation actions in developing countries. Nat Clim Chang 4:961–968. https://doi.org/10.1038/nclimate2370

  45. Jorgenson AK, Schor JB, Huang X, Fitzgerald J (2015) Income inequality and residential carbon emissions in the United States: a preliminary analysis. Human Ecol Revi 22(1):93–106 https://www.jstor.org/stable/24875150

  46. Jorgenson AK, Schor JB, Knight KW, Huang X (2016) Domestic inequality and carbon emissions in comparative perspective. Sociol Forum 31:770–786. https://doi.org/10.1111/socf.12272

  47. Jorgenson AK, Schor JB, Huang X (2017) Income inequality and carbon emissions in the United States: a state-level analysis, 1997-2012. Ecol Econ 134:40–48. https://doi.org/10.1016/j.ecolecon.2016.12.016

  48. Jorgenson AK, Fiske S, Hubacek K, Li J, McGovern T, Rick T, Schor JB, Solecki W, York R, Zycherman A (2019) Social science perspectives on drivers of and responses to global climate change. WIREs Clim Change 10:554. https://doi.org/10.1002/wcc.554

  49. Jun Y, Zhong-kui Y, Peng-fei S (2011) Income distribution, human capital and environmental quality: empirical study in China. Energ Procedia 5:1689–1696. https://doi.org/10.1016/j.egypro.2011.03.288

  50. Kaika D, Zervas E (2013) The environmental Kuznets curve (EKC) theory. Part B: critical issues. Energy Policy 62:1403–1411. https://doi.org/10.1016/j.enpol.2013.07.130

  51. Kang YQ, Zhao T, Yang YY (2016) Environmental Kuznets curve for CO2 emissionsin China: a spatial panel data approach. Ecol Indic 63:231–239. https://doi.org/10.1016/j.ecolind.2015.12.011

  52. Kashwan P (2017) Inequality, democracy, and the environment: a cross-national analysis. Ecol Econ 131:139–151. https://doi.org/10.1016/j.ecolecon.2016.08.018

  53. Kasuga H, Takaya M (2017) Does inequality affect environmental quality? Evidence from major Japanese cities. J Clean Prod 142:3689–3370. https://doi.org/10.1016/j.jclepro.2016.10.099

  54. Khan AQ, Saleem N, Fatima ST (2018) Financial development, income inequality, and CO2 emissions in Asian countries using STIRPAT model. Environ Sci Pollut Res 25:6308–6319. https://doi.org/10.1007/s11356-017-0719-2

  55. Kivyiro P, Arminen H (2015) Carbon dioxide emissions, energy consumption, economic growth, and foreign direct investment: causality analysis for sub-Saharan Africa. Energy 74(1):595–606. https://doi.org/10.1016/j.energy.2014.07.025

  56. Knight K, Rosa E, Schor J (2013) Could working less reduce pressures on the environment? A cross-national panel analysis of OECD countries, 1970-2007. Glob Environ Chang 23:691–700. https://doi.org/10.1016/j.gloenvcha.2013.02.017

  57. Knight KW, Schor JB, Jorgenson AK (2017) Wealth inequality and carbon emissions in high-income countries. Soc Curr 4:403–412. https://doi.org/10.1177/2329496517704872

  58. Kuznets S (1955) Economic growth and income inequality. The American Econ Rev 45(1):1–28 https://www.jstor.org/stable/1811581

  59. Laurent E (2014) Inequality as pollution, pollution as inequality: The social-ecological nexus, Stanford Center on Poverty and Inequality working paper. Available from: https://web.stanford.edu/ group/.../laurent_inequality-pollution.pdf

  60. Liobikienė G, Butkus M (2018) The challenges and opportunities of climate change policy under different stages of economic development. Sci Total Environ 642:999–1007. https://doi.org/10.1016/j.scitotenv.2018.06.140

  61. Liobikienė G, Butkus M (2019) Scale, composition, and technique effects through which the economic growth, foreign direct investment, urbanization, and trade affect greenhouse gas emissions. Renew Energ 132:1310–1322. https://doi.org/10.1016/j.renene.2018.09.032

  62. Liu C, Jiang Y, Xie R (2019) Does income inequality facilitate carbon emission reduction in the US? J Clean Prod 217:380–387. https://doi.org/10.1016/j.jclepro.2019.01.242

  63. Liu Q, Wang S, Zhang W, Li J, Kong Y (2019a) Examining the effects of income inequality on CO2 emissions: evidence from non-spatial and spatial perspectives. Appl Energ 236:163–171. https://doi.org/10.1016/j.apenergy.2018.11.082

  64. Mader S (2018) The nexus between social inequality and CO2 emissions revisited: challenging its empirical validity. Environ Sci Policy 89:322–329. https://doi.org/10.1016/j.envsci.2018.08.009

  65. Magnani E (2000) The environmental Kuznets curve, environmental protection policy and income distribution. Ecol Econ 32(3):431–443. https://doi.org/10.1016/S0921-8009(99)00115-9

  66. Martinez-Alier J, Muradian R (eds) (2015) Handbook of ecological economics. Edward Elgar Publishing, Camberley, Surrey

  67. Matsumoto KI, Tachiiri K, Kawamiya M (2018) Evaluating multiple emission pathways for fixed cumulative carbon dioxide emissions from global-scale socioeconomic perspectives. Mitig Adapt Strategies Glob Change 23(1):1–26. https://doi.org/10.1007/s11027-016-9726-8

  68. McGee JA, Greiner PT (2018) Can reducing income inequality decouple economic growth from CO2 emissions? Sociological Research for Dynamic World 4:1–11. https://doi.org/10.1177/2378023118772716

  69. Neagu O, Teodoru MC (2019) The relationship between economic complexity, energy consumption structure and greenhouse gas emission: heterogeneous panel evidence from the EU countries. Sustainability 11(2):497. https://doi.org/10.3390/su11020497

  70. Ostry JD, Berg A, Tsangarides CG (2014) Redistribution, inequality, and growth, staff discussion note 14/02. IMF, Washington

  71. Parith J, Panada M, Ganesh-Kumar A, Singh V (2009) CO2 emissions structure of Indian economy. Energy 34:1024–1031. https://doi.org/10.1016/j.energy.2009.02.014

  72. Persson T, Tabellini G (1994) Is inequality harmful for growth? Americ Econ Rev 84(3):600–621 https://www.jstor.org/stable/2118070

  73. Policardo L (2016) Is democracy good for the environment? Quasi-experimental evidence from regime transitions. Environ Resour Econ 2:275–300. https://doi.org/10.1007/s10640-014-9870-0

  74. Prell C, Sun L, Feng K, Myroniuk TW (2015) Inequalities in global trade: a cross-country comparison of trade network position, economic wealth, pollution and mortality. PLoS One 10(12):e0144453. https://doi.org/10.1371/journal.pone.0144453

  75. Rao ND, Min J (2018) Less global inequality can improve climate outcomes. WIREs Clim Change:9–13. https://doi.org/10.1002/wcc.513

  76. Ravallion M, Heil M, Jalan J (2000) Carbon emissions and income inequality. Oxford Econ Papers 52:651–666

  77. Roberts T, Parks B (2006) A climate of injustice. MIT Press, Cambridge

  78. Sarkodie SA, Strezov V (2019) Effect of foreign direct investments, economic development and energy consumption on greenhouse gas emissions in developing countries. Sci Total Environ 646:862–871. https://doi.org/10.1016/j.scitotenv.2018.07.365

  79. Sbia R, Shahbaz M, Hamdi H (2014) A contribution of foreign direct investment, clean energy, trade openness, carbon emissions and economic growth to energy demand in UAE. Econ Model 36:191–197. https://doi.org/10.1016/j.econmod.2013.09.047

  80. Schor J (1998) The overspent American: when buying becomes you. Basic Books

  81. Scruggs LA (1998) Political and economic inequality and the environment. Ecol Econ 26:259–275. https://doi.org/10.1016/S0921-8009(97)00118-3

  82. Serino MNV, Klasen S (2015) Estimation and determinants of the Philippines’ household carbon footprint. Dev Econ 53(1):44–63. https://doi.org/10.1111/deve.12065

  83. Shahbaz M, Nasreen S, Abbas F, Anis O (2015) Does foreign direct investment impede environmental quality in high-, middle-, and low-income countries? Energ Econ 51:275–287. https://doi.org/10.1016/j.eneco.2015.06.014

  84. Tang CF, Tan BW (2015) The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam. Energy 79(1):447–454. https://doi.org/10.1016/j.energy.2014.11.033

  85. Torras M, Boyce J (1998) Income, inequality, and pollution: a reassessment of the environmental Kuznets curve. Ecol Econ 2:147–160. https://doi.org/10.1016/S0921-8009(97)00177-8

  86. Turner K, Hanley N (2011) Energy efficiency, rebound effects and the environmental Kuznets curve. Energ Econ 33:709–720. https://doi.org/10.1016/j.eneco.2010.12.002

  87. Veblen T (1934) Theory of the leisure class. Modern Library, New York

  88. Veblen T (2009) The theory of the leisure class. Oxford University Press

  89. Vona F, Patriarca F (2011) Income inequality and the development of environmental technologies. Ecol Econ 70(11):2201–2213. https://doi.org/10.1016/j.ecolecon.2011.06.027

  90. Wang H, Zhou P (2018) Assessing global CO2 emission inequality from consumption perspective: an index decomposition analysis. Ecol Econ 154:257–271. https://doi.org/10.1016/j.ecolecon.2018.08.008

  91. Wang Y, Zhao H, Li L, Liu Z, Liang S (2013) Carbon dioxide drivers for a typical metropolis using input-output structural decomposition analysis. Energy Policy 58:312–318. https://doi.org/10.1016/j.enpol.2013.03.022

  92. Wilkinson R, Pickett K (2009) The spirit level: why more equal societies almost always do better. Allen Lane, London

  93. Wolde-Rufael Y, Idowu S (2017) Income distribution and CO2 emission: a comparative analysis for China and India. Renew Sust Energ Rev 74:1336–1345. https://doi.org/10.1016/j.rser.2016.11.149

  94. Xu X, Han L, Lv X (2016) Household carbon inequality in urban China, its sources and determinants. Ecol Econ 128:77–86. https://doi.org/10.1016/j.ecolecon.2016.04.015

  95. Zhang C, Zhao W (2014) Panel estimation for income inequality and CO2 emissions: a regional analysis in China. Appl Energy 136:382–392. https://doi.org/10.1016/j.apenergy.2014.09.048

  96. Zhang C, Zhou X (2016) Does foreign direct investment lead to lower CO2 emissions? Evidence from a regional analysis in China. Renew Sust Energ Rev 58:943–951. https://doi.org/10.1016/j.rser.2015.12.226

  97. Zhuang J, Kanbur R, Rhee C (2014) What drives Asia’s rising inequality? Inequality in Asia and the Pacific-Trends, Drivers, and Policy Implication p. 37

  98. Zoundi Z (2017) CO2 emissions, renewable energy and the environmental Kuznets curve, a panel cointegration approach. Renew Sust Energ Rev 72:1067–1075. https://doi.org/10.1016/j.rser.2016.10.018

Download references

Author information

Correspondence to Genovaitė Liobikienė.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Responsible editor: Eyup Dogan

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Liobikienė, G. The revised approaches to income inequality impact on production-based and consumption-based carbon dioxide emissions: literature review. Environ Sci Pollut Res (2020). https://doi.org/10.1007/s11356-020-08005-x

Download citation


  • Climate change
  • CO2 emissions
  • Inequality
  • Environmental Kuznets curve
  • Sustainable production and consumption
  • Economic growth