Impact of income inequality on carbon emissions: a matter of corruption governance.

Abstract

Corruption is often linked with income inequality and its impact on carbon emissions. This study investigates the moderating effect of corruption governance on the relationship between income inequality and carbon emissions. Panel data for 62 countries from 2012 to 2020 were used. We employed a threshold panel regression approach, considering income inequality as the explanatory variable and carbon dioxide emissions as the dependent variable, with corruption governance as the threshold variable. Our findings suggest that enhancing the level of corruption governance can mitigate the CO2 emissions driven by income inequality. Specifically, we found a shift in the impact on CO2 emissions when corruption governance crosses a certain threshold. This study provides insights into how improving corruption governance can help in managing the environmental effects of income inequality.