Work

The emission-inequality nexus across stages of development

Year: 2026

Type: article

Abstract: Does a more unequal society emit more CO 2 ? The nexus between carbon emissions and income inequality has been at the core of a vast literature yielding conflicting results. Here, we provide robust evidence of a non-linear relationship that depends on the structural composition of the economy. Specifically, we document a positive association between income inequality—measured using five different indicators, for both pre-tax and post-tax income—and per capita carbon emissions in highly tertiarized countries. By contrast, this relationship turns negative in non-service-intensive economies. We provide evidence for plausible mechanisms mediating this non-linear association. In particular, the investment carbon footprint of the top 1% and the size of the manufacturing sector emerge as key dimensions underlying the observed patterns. Our results point to the structural composition of the economy as a crucial factor shaping the emission-inequality nexus. As such, economic structure helps identify phases of development in which reducing inequality comes with climate-related benefits.

Source: World Development

DOI: 10.1016/j.worlddev.2026.107575

Authors: Francesco Lamperti, Elisa Palagi, Tommaso Perniola

Institutions: Scuola Superiore Sant'Anna, RFF-CMCC European Institute on Economics and the Environment, CMCC Foundation - Euro-Mediterranean Center on Climate Change

Language: English

Topic: Energy, Environment, Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Climate action, Reduced inequalities

Open Access status: hybrid

Estimated APC paid: $5,895