Document Type : ORIGINAL ARTICLE

Authors

• Somayeh Azami ¹
• Fatemeh Hosseini ²

¹ Associate Professor, Department of Economics, Razi University, Kermanshah, Iran.

² M.A. Student, Department of Economics, Razi University, Kermanshah, Iran.

Abstract

Is income equality-environmental quality a win-win or a trade-off situation? The answer to this question has important implications for economic and environmental policies. Clarifying the relationship between income inequality and carbon emissions can be a reference for achieving sustainable development and improving the income allocation mechanism. This study focuses on the provinces of Iran and analyzes this relationship with spatial econometrics in the period of 2007-2015. The results of the cointegration test confirm the long-term relationship between the variables of the model by considering cross-sectional dependence. Also, the results indicate the confirmation of spatial correlation. The estimation of the Spatial Durbin Model shows that the coefficients of time lagged CO2 emissions and time-spatial lagged CO2 emissions are positive and significant, which is a confirmation of the full dynamics of the model. The spatially lagged independent variables (production, energy intensity and Gini coefficient) are significant on CO2 emissions. The positive and significant spatial dependence coefficient indicates that the emission of CO2 in one province has a positive spillover effect on the emission of CO2 in neighboring provinces. Kuznets' environmental hypothesis is confirmed. Gini coefficient and energy intensity have a positive and significant effect on carbon dioxide emissions. Sustainable economic growth can be achieved by reducing energy intensity. Social equity reduces carbon emissions by redistributing income from rich to poor households. Therefore, implementing policies to improve income distribution and strengthening institutions that can help overcome income inequality by supporting the rights of poor people, along with reforming energy policies, can help improve the quality of the environment in Iran.

Keywords

• Income Distribution
• Environmental Quality
• Full Dynamic- Spatial Durbin Model

Main Subjects

• Co2 Emissions