The nexus between renewable energy, income inequality, and consumption-based CO2 emissions: An empirical investigation

The income inequality and emissions nexus have been a hot issue of debate among scholarly circles. However, the effect of income inequality coupled with renewable energy on consumption-based carbon dioxide (CO2) emissions has not been addressed adequately in the recent literature. This study fills the auspicious gap in the literature by investigating the impacts of income inequality and renewable energy on consumption-based CO2 emissions for BRICS economies. Considering the unique features of income distributions, two proxies of income inequality: the Gini index and income earned by the top 10%, are utilized to understand the various analytical approaches. To yield consistent and reliable estimates several panel data estimation techniques are employed for the period from 1994 to 2018 for BRICS economies. Empirical results reveal that income inequality contributes to consumption-based CO2 emissions in the atmosphere. However, renewable energy helps in reducing consumption-based CO2 emissions. Based on the empirical findings, the study suggests important policy implications for BRICS countries to control the environmental impacts.