Background and Objective
Today, the increase in greenhouse gas emissions and climate change is one of the fundamental challenges, particularly in oil-rich countries. Climate change studies have shown that climatic changes exacerbate income inequality both within and between countries, such that poorer populations are more vulnerable to climate impacts. This article aims to assess the effects of wealth inequality on the carbon footprint in four countries—Iran, Kuwait, Saudi Arabia, and the UAE—during the period from 1995 to 2023. These countries, due to their vast energy resources and high economic dependence on oil and gas exports, have a significant share in carbon emissions. Examining the factors influencing this trend can play an important role in formulating pollution-reduction policies.
Materials and Methods
In this study, the wealth shares of the top 1% and 10% of the population are used as indicators of wealth concentration, while the shares of the middle 40% and bottom 50% are used as indicators of more equitable wealth distribution. In addition, variables such as per capita income, energy intensity, and total energy production are considered control variables. To estimate the effects, the fixed effects method and robust regression were used to ensure the stability of the results. Robust Least Squares (RLS) refers to a set of regression methods designed to be more resistant or less sensitive to outliers.
Results and Discussion
The results of the study showed that wealth inequality, per capita income, energy intensity, and total energy production all have a positive and significant effect on the carbon footprint in Iran, Kuwait, Saudi Arabia, and the UAE. In particular, an increase in the wealth share of the top 1% and 10% leads to higher carbon emissions, while an increase in the share of the middle 40% and bottom 50% has a negative effect. These findings indicate that economic inequality and wealth concentration among high-income groups have negative consequences not only in terms of social justice but also from an environmental perspective. Additionally, per capita income has also acted as a key factor in increasing the carbon footprint, which may be linked to higher energy consumption and increased use of fossil fuels. Energy intensity and total energy production have shown a consistently positive and significant impact on carbon emissions in all models. These results suggest that the energy-intensive and inefficient economic structure in these countries has led to high energy consumption and increased pollution. Based on the findings, three policy recommendations are proposed; First, reforming the wealth distribution system and reducing economic inequality. By implementing policies such as taxing wealth and high incomes, supporting the middle and lower classes, and investing in public services, inequality can be reduced, thus mitigating the environmental effects of wealth concentration. Second, increasing energy efficiency and reducing energy intensity. Investment in energy-efficient technologies, optimizing consumption in industry and transport, and gradually removing fossil fuel subsidies can reduce energy intensity and help control carbon emissions. The findings suggest that reducing wealth inequality, improving energy efficiency, and developing renewable energy can contribute to lowering the carbon footprint and enhancing environmental sustainability in these countries.