1- University of Mazandaran , m.mohammadifar02@umail.umz.ac.ir
2- University of Mazandaran
2- University of Mazandaran
Abstract: (107 Views)
Climate change and income inequality are intertwined challenges of sustainable development, yet empirical evidence on the role of government size in environmental quality remains inconclusive. Focusing on three carbon-based indicators, territorial carbon dioxide emissions, consumption-based carbon footprint, and production-based carbon footprint, this study examines the relationship between government size and environmental quality and investigates whether income inequality moderates the magnitude and direction of this relationship. Using panel data for 58 countries over the period 1994–2023, the model is estimated based on five-year averages and diagnostic-based estimators, including FGLS and random effects with country-clustered standard errors; PCSE is also reported as a robustness check for the territorial-emissions group. Income inequality is measured using four complementary indicators: pre-tax and post-tax Gini coefficients, the income ratio of the top 20 percent to the bottom 20 percent, and the tenth-to-first decile ratio. The results show that government size, at the average level of inequality, is associated with higher carbon-based indicators and, consequently, lower environmental quality; however, this relationship depends on the structure of income distribution, the type of carbon indicator, and the inequality measure used. The negative interaction terms indicate that income inequality weakens the positive association between government size and carbon-based indicators. The income-heterogeneity analysis for per capita carbon dioxide emissions further shows that this relationship is stronger in countries below the median income level. In addition, the estimated income coefficients are consistent with the environmental Kuznets curve hypothesis, although most observations remain on the upward-sloping segment of the curve. Overall, the findings suggest that improving environmental quality requires coordinating redistributive policies with a reorientation of public spending toward low-pollution sectors and low-carbon infrastructure.
Type of Study: Applicable |
Subject:
انرژی، منابع و محیط زیست
Received: 2025/12/29 | Accepted: 2026/06/29
Received: 2025/12/29 | Accepted: 2026/06/29
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