What matters for environmental quality in the Next Eleven Countries: economic growth or income inequality?

This study uses panel data for the period 1971-2013 to explore the implications of growth, wealth disparities, and per capita energy consumption on carbon emissions in a sample of Next Eleven (N-11) countries. It uses the first-generation (Pedroni and Kao) and second-generation (Westerlund) cointegration techniques to highlight a long-run interplay between the selected variables in carbon emission functions for all the N-11 countries. It also analyzes the long-run interactions among the series. Contrastingly, it also shows that economic growth, income inequalities, and per capita energy consumption accelerate CO₂ emissions. Besides examining the effects of wealth disparity square, the study also uses the environmental Kuznets curve hypothesis in the context of the N-11 countries and discusses the policy implications of its findings.