EcoSta 2022: Start Registration
View Submission - EcoSta2022
A0356
Title: The dependence between income inequality and carbon emissions: A distributional copula analysis Authors:  Franziska Dorn - University of Goettingen (Germany) [presenting]
Thomas Kneib - University of Goettingen (Germany)
Simone Maxand - Europa-Universität Viadrina (Germany)
Abstract: High levels of carbon emissions and rising income inequality are interconnected challenges for the global society. Commonly-applied linear regression models fail to unravel the complexity of bidirectional transmission channels. In particular, consumption, energy sources, the structure of the economy and the political system are determinants of the strength and direction of the dependence between emissions and inequality. To capture their impact, the conditional dependence between income inequality and emissions is investigated by applying distributional copula models on an unbalanced panel data set of 154 countries from 1960 to 2019. A comparison of high-, middle- and low-income countries contradicts a linear relationship and sheds light on heterogeneous dependence structures implying synergies, trade-offs and decoupling between income inequality and carbon emissions. Based on the conditional distribution, we can identify determinants associated with higher/lower probabilities of a country falling in an area of potential social and environmental sustainability. The results imply that the joint activation of multiple channels opens the way for a sustainable future.