Will income inequality affect environmental quality? Analysis based on China's provincial panel data

During the last two decades of China's rapid economic growth, the gap in citizens’ income has widened and environmental quality has deteriorated. Using Gini coefficients as the measure of income inequality, this study investigated the impacts of income inequality on carbon emissions per capita in China. To control for potential endogeneity and allow for dynamics, the Generalized Method of Moments (GMM) technique is utilized. Moreover, the influential factors that can affect carbon emissions per capita in China have been examined. The empirical results indicate that carbon emissions per capita increase as the income gap expands for nationwide and in the eastern and non-eastern regions of China. Among all factors that may affect carbon emissions per capita, a “U” shaped relationship exists between per capita income and per capita carbon emissions, and increasing the value-added share of secondary industry in the GDP would significantly increase carbon emissions per capita.