Income inequality, ecological footprint, and carbon dioxide emissions in Asian developing economies: what effects what and how?

The reduction of income inequality and environmental vulnerability is the most important factor, through which we can achieve the target of Sustainable Development Goals (SDGs). The past papers have investigated the nexus between income inequality and carbon emissions; however, the relationship between income inequality and carbon emissions along with ecological footprint has not been studied in the case of developing countries. To this end, this study analyzed the impact of income inequality on both carbon emissions and ecological footprint as well as the impact of carbon emission and ecological footprint on income inequality by using the dataset from 2006 to 2017 for the 18 Asian developing economies. This study confirmed the positive relationship between carbon emissions, ecological footprint, and income inequality under the methodology of Driscoll and Kraay (D&K) standard error approach. Specifically, a higher-income gap is destructive for environmental degradation, whereas increasing level of carbon emissions and ecological footprint also leads to rising income inequality in the investigated region. Furthermore, foreign direct investment (FDI), easy access to electricity, and population growth control income inequality, but they have a detrimental effect on both ecological footprint and carbon emissions. The empirical findings also provide some important policy implications.