Nexus Between Income Inequality and Carbon Dioxide Emissions in Kenya

Abstract

Disparities in income and degradation of the environment are issues that have given rise to international debates and await immediate resolution. This paper scrutinized the nexus between income inequality and carbon dioxide discharges in Kenya. We examined the applicability of the EKC hypothesis in Kenya. We employed time series secondary data from World Bank Development Indicators for the years 1987 to 2018 and employed the ARDL model to determine a possible nexus in the series. The study included Energy consumption, Urbanization rate and Trade Openness to avoid omission of variables. According to the ARDL test results, the long-run nexus between Carbon dioxide discharges and inequitable distribution of income is inconclusive. The study reveals that inequitable distribution of income has positive but statistically insignificant impact on carbon dioxide emissions in Kenya. The outcome of this research is in accordance with the theory of Marginal propensity to emit, arguing that equality harms the environment. The study finding also indicate that EKC hypothesis is not applicable in Kenya. This finding is supported by the fact that Kenya is still developing and is yet to get to the turning point of EKC. The study findings recommend that government should come up with policies that advocate for consumption of solar, wind and geothermal energy. The findings discourage the use of fossils fuel as it leads to increased levels of Carbon dioxide emissions.