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Income inequality and carbon consumption: evidence from Environmental Engel curves

Sager, Lutz (2019) Income inequality and carbon consumption: evidence from Environmental Engel curves. Energy Economics. ISSN 0140-9883

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Identification Number: 10.1016/j.eneco.2019.104507

Abstract

I investigate the relationship between income inequality and the carbon dioxide (CO2) content of consumption. I quantify the CO2 content of household expenditure using input-output analysis and estimate Environmental Engel curves (EECs) which describe the income–emissions relationship. Using EECs for the United States between 1996 and 2009, I decompose the change in CO2 over time and the distribution of emissions across households. In both cases, income is an important driver of household carbon. Finally, I describe a potential “equity-pollution dilemma”—progressive income redistribution may raise the demand for aggregate greenhouse gas emissions. I estimate that transfers raise emissions by 5.1% at the margin and by 2.3% under complete redistribution.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/energy-econo...
Additional Information: © 2019 Elsevier B.V.
Divisions: Methodology
Geography & Environment
JEL classification: D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q40 - General
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Costs; Distributional Effects; Employment Effects
Date Deposited: 18 Nov 2019 15:21
Last Modified: 06 Dec 2019 00:19
URI: http://eprints.lse.ac.uk/id/eprint/102561

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