The impact of geopolitical risk on CO2 emissions inequality: Evidence from 38 developed and developing economies

Abstract

This paper analyses the impact of geopolitical risk on carbon dioxide (CO₂) emissions inequality in the panel dataset of 38 developed and developing economies from 1990 to 2019. At this juncture, the empirical models control for the effects of globalisation, capital-labour ratio, and per capita income on CO₂ emissions inequality. The panel cointegration tests show a significant long-run relationship among the related variables in the empirical models. The panel data regression estimations indicate that geopolitical risk, capital-labour ratio, and per capita income increase CO₂ emissions inequality. However, globalisation negatively affects CO₂ emissions inequality in the panel dataset of 38 developed and developing countries. The pairwise panel heterogeneous causality test results align with these benchmark results and indicate no reverse causality issue. Potential policy implications are also discussed.

Keywords: CO(2) emissions inequality; Capital-labour ratio; Geopolitical risk; Globalisation; per capita income.