Introduction: The increasing emission of greenhouse gases and the consequences of climate change have become major global challenges, particularly in oil-rich countries. Evidence suggests that climate change not only heightens the vulnerability of low-income populations but also exacerbates economic inequality. This study aims to evaluate the impact of wealth inequality on the carbon footprint in Iran, Kuwait, Saudi Arabia, and the United Arab Emirates over the period 1995–2023. Owing to their vast energy resources and heavy dependence on oil and gas exports, these countries account for a substantial share of global carbon emissions. Therefore, identifying the factors influencing this trend is crucial for designing effective environmental and pollution-reduction policies.
Materials and Methods: In this study, the wealth shares of the top 1% and top 10% of the population are used as indicators of wealth concentration, while the wealth shares of the middle 40% and bottom 50% are employed as measures of a more equitable wealth distribution. Per capita income, energy intensity, and total energy production are included as control variables. To estimate the effects, both the Fixed Effects (FE) model and Robust Least Squares (RLS) regression are applied to ensure the robustness and reliability of the findings. Robust Least Squares refers to a set of regression techniques specifically designed to reduce sensitivity to outliers and influential observations, thereby providing more reliable parameter estimates.
Results: The findings reveal that wealth inequality, per capita income, energy intensity, and total energy production all exert a positive and statistically significant effect on the carbon footprint in Iran, Kuwait, Saudi Arabia, and the United Arab Emirates. Specifically, increases in the wealth shares of the top 1% and top 10% lead to higher carbon emissions, whereas increases in the wealth shares of the middle 40% and bottom 50% are associated with lower carbon emissions. These results indicate that economic inequality and the concentration of wealth among high-income groups generate adverse environmental consequences in addition to raising concerns about social equity. Per capita income also emerges as a key driver of carbon emissions, likely reflecting higher energy consumption and greater reliance on fossil fuels as income levels rise. Furthermore, both energy intensity and total energy production have positive and significant effects on carbon emissions across all estimated models.
Discussion: The results suggest that the energy-intensive and relatively inefficient economic structures of these countries contribute to excessive energy consumption and rising environmental pollution. Based on the findings, three major policy recommendations are proposed. First, policymakers should pursue reforms aimed at improving wealth distribution and reducing economic inequality. Measures such as progressive taxation on wealth and high incomes, support for middle- and lower-income groups, and increased investment in public services can help mitigate inequality and reduce the environmental costs associated with wealth concentration. Second, improving energy efficiency and reducing energy intensity should be prioritized. Investments in energy-efficient technologies, optimization of industrial and transportation energy use, and the gradual removal of fossil-fuel subsidies can contribute significantly to lowering carbon emissions. Third, accelerating the transition toward renewable energy sources is essential for achieving long-term environmental sustainability. Overall, the findings indicate that reducing wealth inequality, enhancing energy efficiency, and expanding renewable energy development can play a crucial role in lowering the carbon footprint and improving environmental sustainability in these oil-dependent economies.