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Abstract

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.

5. Conclusion

This study contributes to multidisciplinary research on the human dimensions of climate change by analyzing the associations between CO2 emissions and different types of income inequality at the U.S. state level. Global and international inequalities of various types have been widely studied. However, there is limited research on income inequality and CO2 emissions, and it has been primarily conducted at the nation state level, focusing on how income inequality across nations influences national-level emissions. While potentially illuminating, cross-national research might overlook heterogeneity within nations, including the association between income inequality and CO2 emissions. Thus, the present study advances climate change research by investigating if and how multiple characteristics of income inequality are associated with emissions, and the analysis is conducted at a sub-national level, providing a more nuanced view of these socio-environmental relationships. The results of the longitudinal analysis indicate that a higher concentration of income among the top 10% (as well as the top 5% and the top 1%) is positively associated with U.S. state-level emissions, while the Gini coefficient's effect of CO2 emissions is not significantly different than zero. Our findings concerning the concentration of income among the top of the distribution are consistent with analytical approaches that focus on political economy dynamics and Veblen effects, which highlight the potential economic and political power and the emulative influence of the wealthy. The null effects of the Gini coefficient are generally inconsistent with the marginal propensity to emit approach, which suggests that when incomes become more equally distributed, the poor will increase their consumption of energy and other products as they move into the middle class, leading to an overall increase in anthropogenic emissions. These results hold across multiple model specifications, and net of the effects of other established economic, demographic, and political drivers of CO2 emissions.