Impact of income inequality on climate change in Asia: the role of human capital

Abstract

AbstractApplying different regression estimators on balanced panel data, this article examines the impact of human capital and income inequality on climate change in Asian countries during the period 2007–2020. Results by the GMM estimator confirm that increases in income inequality and investments in human capital exacerbate environmental degradation in Asian countries. However, among the three variables that represent human capital, only HC3 (Gross enrollment ratio for tertiary school) plays a role in reducing the impact of income inequality on emissions of carbon dioxide. In addition, the study also provides evidence on the impact of other factors on CO2 emissions such as renewable energy, economic growth, population, output in the agricultural and services sectors, trade openness, government expenditure and total investment in the economy. Besides, some important policy implications have been suggested to aim at securing sustained economic growth in Asia.