Is skewed income distribution good for environmental quality? A comparative analysis among selected BRICS countries

Abstract

A large number of studies have examined the linkage between income inequality and environmental quality at the individual country levels. This study attempts to examine the linkage between the two factors for the individual BRICS economies from a comparative perspective, which is scarce in the literature. It examines the selected countries (Brazil, India, China and South Africa) by endogenising the patterns of primary energy consumption (coal use and petroleum use), total primary energy consumption, economic growth, and urbanisation as key determining factors in CO₂ emission function. The long-run results based on ARDL bounds testing revealed that income inequality leads to increase in CO₂ emissions for Brazil, India and China, while the same factor leads to reduction in CO₂ emissions for South Africa. However, it observes that while coal use increases CO₂ emissions for India, China and South Africa, it has no effect for Brazil. In contrast, the use of petroleum products contributes to CO₂ emissions in Brazil, while the use of the same surprisingly results in reduction of carbon emissions in South Africa, India and China. The findings suggest that given the significance of income inequality in environmental pollution, the policy makers in these emerging economies have to take into consideration the role of income inequality, while designing the energy policy to achieve environmental sustainability.