The income share of the top 10% increases CO2 emissions

Income Inequality and Carbon Emissions in the United States: A State-level Analysis, 1997–2012, by Andrew Jorgensona, , Juliet SchorbXiaorui Huangb  http://dx.doi.org/10.1016/j.ecolecon.2016.12.016

  • The relationship between CO2 emissions and income inequality is analyzed longitudinally at the state level in the US
  • The income share of the top 10% increases CO2 emissions.  The effect of the Gini coefficient on CO2 emissions is nonsignificant.

This study investigates the relationship between U.S. state-level CO2 emissions and two measures of income inequality: the income share of the top 10% and the Gini coefficient. Each of the inequality measures, which focus on unique characteristics of income distributions, is used to evaluate the arguments of different analytical approaches. Results of the longitudinal analysis for the 1997 to 2012 period indicate that state-level emissions are positively associated with the income share of the top 10%, while the effect of the Gini coefficient on emissions is non-significant. The statistically significant relationship between CO2 emissions and the concentration of income among the top 10% is consistent with analytical approaches that focus on political economy dynamics and Veblen effects, which highlight the potential political and economic power and emulative influence of the wealthy. The null effect of the Gini coefficient is generally inconsistent with the marginal propensity to emit approach, which posits that when incomes become more equally distributed, the poor will increase their consumption of energy and other carbon-intensive products as they move into the middle class.

The coal, oil, and natural gas that fuel the majority of electricity generation produce more than one-third of global greenhouse gas emissions. Generous subsidies continue to support fossil fuel investment, despite growing evidence that clean energy can be lower-risk and often lower-cost. And more than 1.3 billion people still lack access to the electricity they need to raise their standard of living.