Mechanisms explaining the impact of economic inequality on environmental deterioration

- The paper compares theories analysing the effect of inequality in the environment.
- Our framework identifies the mechanisms at work in these theories.
- In the empirical literature, inequality is found to negatively affect biodiversity and environmental policy.
- Current empirical methods do not account for the variety of theoretical mechanisms.
- An investigatory strategy is proposed to overcome this limitation.

Rising economic inequality, often considered intrinsically harmful, is increasingly being viewed as having a number of secondary impacts as well, including impacts on health and economic growth. The ongoing nature of today's environmental crisis also raises questions about inequality's role in environmental deterioration. Despite the large number of papers that have been written on this topic, no theoretical or empirical consensus presently exists. Firstly, our article identifies that authors' conclusions in this area depend on their hypotheses regarding 1) the relationship between individual income and individual environmental pressure, 2) the impact of inequality on the social norms that influence individual environmental pressure, 3) the interests that social groups have in degrading or protecting the environment, 4) how these interests play out in terms of political demands, and 5) how these political demands translate into political decisions. Secondly, the study shows that, despite enabling a general test of the causal relationship between inequality and the environment, the empirical methods utilised do not account for the full range of theoretical mechanisms in play. Hence the suggestion that a research programme be launched to conduct empirical studies of the five aforementioned hypotheses by applying a recursive approach.