Income Inequality, Ecological Footprint, and Carbon Dioxide Emissions in Asian Developing Economies: What Effects What and How?

Abstract

The reduction of income inequality and environmental vulnerability are two most important factors, through which we can achieve the target of Sustainable Development Goals (SDGs). The past papers have investigated the nexus between income inequality and carbon emissions, however, the relationship between income inequality and carbon emissions along with ecological footprint needs to be considered. To this end, the objective of current study is to reveals the causal association between income inequality and environmental vulnerability (the ecological footprint and carbon emissions used as a measures of environmental vulnerability) by using the dataset from 2006 to 2017 for the 18 Asian developing economies. The empirical results obtained from Driscoll and Kraay (D&K) standard error estimator confirmed the casual linkages between income inequality, ecological footprint, and carbon emissions. Furthermore, foreign direct investment, easy access to electricity, and population growth control income inequality, but they have a detrimental effect on both ecological footprint and carbon emissions. Lastly, based on our empirical findings, some important policy implications are recommended.