Does Inequality Affect Climate Change? A Regional and Sectoral Analysis

We examine the time-varying relationship between income inequality and carbon dioxide emissions at the sub-national regional and sectoral levels in Australia from 1990 to 2017. We find the relationship between income inequality and carbon dioxide emissions to be non-linear and either negative or statistically insignificant. We also find significant cross-industry heterogeneity in the income inequality-carbon dioxide emissions nexus, exposing how sector-specific events, such as mining business cycles, are exemplified through the relationship.