Income inequality and the environmental Kuznets curve

This study explores the link between environmental degradation, economic growth and income inequality within the framework of the environmental Kuznets curve (EKC) literature. To investigate this issue, we examine how inequality relates to carbon dioxide (CO2) emissions and to the link between CO2 and economic growth. We show that the results heavily depend on the specification that one chooses and argue that the fixed-effect (FE) model is more appropriate in this context than the pooled ordinary least square (OLS) model that has been used in the literature on this subject. Using a FE model we find that inequality is always non significantly related to CO2 emissions.