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The heterogeneous effects of urbanization and income inequality on CO2 emissions in BRICS economies: evidence from panel quantile regression

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Abstract

This paper empirically examines the effects of urbanization and income inequality on CO2 emissions in the BRICS economies (i.e., Brazil, Russia, India, China, and South Africa) during the periods 1994–2013. The method we used is the panel quantile regression, which takes into account the unobserved individual heterogeneity and distributional heterogeneity. Our empirical results indicate that urbanization has a significant and negative impact on carbon emissions, except in the 80th, 90th, and 95th quantiles. We also quantitatively investigate the direct and indirect effect of urbanization on carbon emissions, and the results show that we may underestimate urbanization’s effect on carbon emissions if we ignore its indirect effect. In addition, in middle- and high-emission countries, income inequality has a significant and positive impact on carbon emissions. The results of our study indicate that in the BRICS economies, there is an inverted U-shaped environmental Kuznets curve (EKC) between the GDP per capita and carbon emissions. The conclusions of this study have important policy implications for policymakers. Policymakers should try to narrow the income gap between the rich and the poor to improve environmental quality; the BRICS economies can speed up urbanization to reduce carbon emissions, but they must improve energy efficiency and use clean energy to the greatest extent in the process.

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Acknowledgements

Our deepest gratitude goes to the Editor, Prof. Philippe Garrigues, and the anonymous referee for their helpful comments and constructive suggestions which ultimately improved the article.

Funding

This research is partly supported by the National Natural Science Foundation of China under Grant Nos.71671062, 71521061, and 71431008.

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Authors and Affiliations

  1. College of Business Administration, Hunan University, Changsha, Hunan Province, China

    Huiming Zhu, Hang Xia, Yawei Guo & Cheng Peng

Authors
  1. Huiming Zhu
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  2. Hang Xia
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  3. Yawei Guo
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  4. Cheng Peng
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Corresponding author

Correspondence to Huiming Zhu.

Additional information

Responsible editor: Philippe Garrigues

Highlights

• This paper investigates the effects of urbanization and income inequality on CO2 emissions in the BRICS economies

• The heterogeneous direct and indirect effects of urbanization on CO2 emissions exist across quantile levels

• Urbanization significantly improves environmental quality in low- and middle-emission countries

• The results indicate that income inequality significantly increases the CO2 emissions at high quantile levels

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Zhu, H., Xia, H., Guo, Y. et al. The heterogeneous effects of urbanization and income inequality on CO2 emissions in BRICS economies: evidence from panel quantile regression. Environ Sci Pollut Res 25, 17176–17193 (2018). https://doi.org/10.1007/s11356-018-1900-y

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  • DOI: https://doi.org/10.1007/s11356-018-1900-y

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