Journal of Environmental Science Studies

Journal of Environmental Science Studies

Comparing and Investigating the Effects of Income Inequality on Air Pollution; Case Study: Selected Member Countries of the Shanghai Cooperation Organization

Document Type : Original Article

Authors
1 Associate Professor of Department of Economics, Faculty of Management and Humanities, Chabahar Maritime University, Chabahar, Iran.
2 the Degree of Master of Economics, Department of Economics, Faculty of Management and Humanities, Chabahar Maritime University, Chabahar, Iran.
10.22034/jess.2025.548118.2409
Abstract
Environmental challenges, notably air pollution and climate change, have increasingly attracted scholarly and policy attention in recent years. Among the contributing factors, income inequality may affect pollution levels by altering consumption patterns and shaping societal demand for environmental quality. This study investigates the impact of income inequality on air pollution in member countries of the Shanghai Cooperation Organisation, employing the Panel Autoregressive Distributed Lag (ARDL) approach across the period 2000–2022. The results reveal that rising income inequality exerts a statistically significant positive effect on carbon dioxide emissions, suggesting that unequal income distribution contributes to environmental degradation. Moreover, the findings underscore the mitigating roles of renewable energy consumption, gross domestic product, and education levels in reducing environmental pollutants. These insights offer valuable guidance for policymakers seeking to address income inequality while advancing air quality and environmental sustainability.
Introduction

Income distribution has long been debated in economic policy discussions. While the focus of developing economies often centers on growth, advanced economies emphasize equitable income distribution to improve social welfare. Air pollution, particularly carbon dioxide emissions, is a critical environmental issue affecting health and economic stability. The Kuznets Environmental Curve suggests a nonlinear relationship where pollution initially rises with economic growth but later declines as economies adopt sustainable practices. This study investigates whether income inequality influences air pollution patterns in SCO countries, considering economic structure, policy interventions, and environmental regulations. In recent decades, the accelerating pace of industrialization and urbanization has intensified environmental challenges, particularly air pollution, which poses severe risks to public health and ecological sustainability. At the same time, income inequality has emerged as a critical socio-economic issue that not only affects social welfare but may also influence environmental quality through consumption behavior, energy demand, and political economy mechanisms. Although a growing body of literature has examined the inequality–environment nexus at the national level, limited attention has been paid to its implications within the framework of regional economic organizations, where member states share common interests and cooperative policies. Against this backdrop, the present study investigates the impact of income inequality on air pollution in the Shanghai Cooperation Organization (SCO) member countries over the period 2000–2022, providing novel insights into the interaction between socio-economic disparities and environmental degradation in a multilateral context.

Materials and methods
This research employs Panel ARDL modelling to analyze the relationship between income inequality (Gini coefficient) and air pollution (CO₂ emissions) in selected SCO member states from 2000 to 2022. Additional variables include GDP per capita, urban population growth, literacy rates, and renewable energy consumption. The dataset was obtained from the World Bank and other official sources. Unit root tests were conducted to confirm stationarity, followed by cointegration analysis to assess long-term relationships. The model estimates both short-run and long-run effects to provide a comprehensive understanding of policy implications. The study employs a Panel Autoregressive Distributed Lag (Panel ARDL) approach, which allows for the estimation of both short-run and long-run relationships among the variables while accommodating mixed orders of integration. The analysis covers 11 SCO member states, namely Russia, China, India, Iran, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Pakistan, Belarus, and Mongolia. The dependent variable is carbon dioxide (CO₂) emissions, used as a proxy for air pollution. The primary explanatory variable is the Gini coefficient as a measure of income inequality, while control variables include GDP per capita, renewable energy consumption, urbanization rate, and literacy rate. Diagnostic tests such as cross-sectional dependence, Chow, Hausman, and Pedroni co-integration tests, as well as an error correction mechanism (ECM), were conducted to validate the robustness of the results.

Results and discussion
Findings confirm that income inequality negatively impacts air quality. Higher inequality correlates with increased CO₂ emissions, reinforcing the view that unequal economic structures contribute to environmental degradation. Countries with lower inequality demonstrate better pollution control due to broader access to cleaner technologies and stronger environmental governance. The results also show that increasing renewable energy consumption and GDP per capita significantly reduce pollution levels. Educational attainment plays a supportive role by fostering environmental awareness. These findings highlight the necessity of inclusive growth policies and clean energy investments to curb pollution. Empirical results reveal several important outcomes: - Income inequality exerts a negative and statistically significant effect on environmental quality, implying that greater disparities in income distribution lead to higher CO₂ emissions and worsened air pollution. - Renewable energy consumption and educational attainment significantly reduce CO₂ emissions in the long run, underscoring their role in fostering sustainable development. - The effect of GDP per capita follows the Environmental Kuznets Curve (EKC) hypothesis, suggesting that economic growth initially intensifies air pollution but subsequently contributes to environmental improvement once a certain income threshold is surpassed. - Urbanization is positively associated with CO₂ emissions, reflecting the environmental pressures of rapid population growth in urban areas. - The error correction term of -0.25 indicates a relatively fast speed of adjustment, with approximately 25% of short-run disequilibrium corrected annually toward long-run equilibrium.

Conclusion
This study underscores the critical intersection of economic inequality and environmental sustainability. Addressing income disparities through progressive taxation and redistributive policies can play a vital role in mitigating pollution. Furthermore, expanding renewable energy infrastructure and integrating environmental education into policy frameworks are essential strategies for long-term improvement. SCO member nations can leverage collaborative policymaking to balance economic growth with ecological responsibility. The findings confirm that income inequality is a significant determinant of environmental degradation in SCO member countries. Reducing inequality not only enhances social cohesion but also contributes to mitigating air pollution and improving environmental quality. Furthermore, investments in renewable energy, educational expansion, and sustainable economic growth represent effective pathways for reducing carbon emissions. From a policy perspective, SCO member states should prioritize: 1. Redistributive fiscal reforms—including progressive taxation and targeted social spending—to reduce inequality and strengthen environmental outcomes. 2. Environmental taxation and incentives—imposing levies on highly polluting industries and reallocating revenues toward renewable energy projects and clean technologies. 3. Support for low-income households—through subsidies and access to energy-efficient housing and infrastructure, reducing their reliance on polluting energy sources. 4. Regional cooperation—formulating harmonized environmental policies and promoting the exchange of green technologies among SCO members. 5. Educational initiatives—raising awareness of environmental issues and fostering eco-friendly consumption and production practices.
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