Determinants of carbon inequality in China from static and dynamic perspectives

Carbon inequality (CI) is one of the core issues concerning social welfare and economic development. To overcome the disadvantages of the widely used Theil economic inequality index, which does not consider technical efficiency and technological change, we developed static and dynamic inequality analysis tools by incorporating production-theoretical decomposition analysis, a logarithmic mean Divisia index, and a Shapley/Sun method into the Theil index decomposition model. We then investigated the determinants of China's CI during the period 2003-2015 using the original and modified Theil index decomposition models. Our key findings are: 1) national CI experienced a downward trend with some fluctuations over time; 2) intragroup inequality was the main driver of these changes using the original approach; 3) the disparities in industrialization, investment scale, income, population share, potential carbon factor, energy usage technical efficiency, and CO2 emission technological change accounted for the decreases in CI, whereas the disparities in investment rate, potential energy intensity, industrial investment-output share, energy usage technological change and CO2 emission technical efficiency contributed to increases in CI. We offer some policy proposals based on our results. (C) 2020 Elsevier Ltd. All rights reserved.