Title: Economic growth, inequality and environmental degradation

Authors: Michael T. Dorsch; Bethany Kirkpatrick

Addresses: School of Public Policy, Central European University, Quellenstraße 51, 1100 Wien, Austria; Democracy Institute, Nádor utca 9, 1051 Budapest, Hungary ' Berkeley Research Group, 8 Salisbury Square, London, EC4Y 8AP, UK

Abstract: This paper re-examines the relationship between economic growth and environmental degradation and tests the validity of the environmental Kuznets curve (EKC) hypothesis by considering the role of income inequality. Using the ecological footprint (EF) as a consumption-based indicator of environmental degradation and the most comprehensive income inequality data available, we demonstrate that the environmental impact of economic growth depends on the distribution of income. We find evidence of an EKC relationship between the EF and economic growth; however, this result is conditional upon a perfectly egalitarian distribution of within-country income. For higher degrees of income inequality, we find no evidence of a 'turning point' within an empirically feasible range. These results suggest that when the gains of economic growth are concentrated the associated rate of environmental degradation is greater than when they are more broadly shared.

Keywords: environmental Kuznets curve; EKC; economic growth; income inequality; sustainable development.

DOI: 10.1504/IJSD.2021.118844

International Journal of Sustainable Development, 2021 Vol.24 No.2, pp.124 - 140

Accepted: 31 May 2021
Published online: 02 Nov 2021 *

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