Income inequality, educational attainment and environmental degradation: evidence from global panel

The Sustainable Development Goal (SDG) 10 focuses on combating the climate change and its effects. The inclusion of this agenda in the Sustainable Development Goals by the United Nations has shown that worsened environmental degradation is currently a major threat facing humankind. The World Commission on Environment and Development 2015 has highlighted that income inequality is one of the major causes for environmental deterioration. Hence, reducing environmental degradation requires a look at the problem of unequal income distribution. Moreover, educational attainment plays a vital role in providing relevant knowledge and skills to people in handling environmental problems. Thus, the objective of the study is to investigate the relationship between income inequality, educational attainment, and CO₂ emissions by employing a panel data analysis for a group of 64 countries from 1990 to 2016.The study uses mainly dynamic common correlated effects (DCCE) estimator to take into account the issue of cross-section dependence which has been ignored by most of the previous studies. By tackling the problem of cross-section dependence, unbiased and reliable results could be produced in estimations. Our results portray that an inverted U-shaped environmental Kuznets curve (EKC) is found to be valid. Additionally, income inequality has a negative impact on environmental degradation. Likewise, educational attainment and CO₂ emissions are revealed to be negatively correlated. The findings of the study could provide a better understanding on the root causes of environmental degradation, and further suggest remedial actions to overcome the problem.