Turning points for environmental sustainability: the potential role of income inequality, human capital, and globalization

Recently, the potential role of social indicators in environmental degradation gets immense attention. Environmental degradation and income inequality are two of the hot topics of debate that anticipate urgent solution. However, income inequality-CO₂ emissions nexus has been little investigated in the literature. This study explores the relationship between income inequality and carbon dioxide emission by incorporating globalization and human capital as the determinants of this relationship. The study deploys an innovative technique of dynamic auto-regressive distributive lag simulation to evaluate data covering the period 1980-2015. Findings indicate that unequal distribution of wealth negatively affects carbon emissions. Likewise, the results show that globalization and human capital contribute to environmental degradation. The inclusion of transmission variables validates findings of the study. Policy strategies toward better income distribution and positive externalities of globalization are suggested for sustainability transitions.