Testing the Equity-Pollution Dilemma From A Global Perspective: Does Reducing Consumption İnequality İmpose Environmental Burdens?

Abstract

The theory of equity pollution dilemma suggests that income redistribution causes environmental pollution. However, little research has been done to test the validity of the equity-pollution dilemma hypothesis on a global scale. Hence, the objective of this study is to examine how reducing consumption inequality imposes environmental burden in the form of greenhouse gas intensity across the world. The choice of the other variables such as natural resource rents and technological innovation also based on the previous empirical works. We consider 61 countries based on the availability of data and divide the countries into different income groups according to the World Bank classification. We use several other independent variables such as quality of governance, climate change mitigation law and access to electricity. We apply two-step system GMM technique for the full sample and one step system GMM for the income groups. The results depict that reducing consumption inequality increases GHG emissions all over the world. Natural resource rents and technological innovation helps to increase GHG emission. On the other hand, access to electricity has a negative impact on GHG emissions, whereas climate change mitigation law has an opposite impact on GHG emission intensity. The results vary for the income groups. Policy implications are suggested based on the outcome. © 2023 International Association for Gondwana Research