Is Inequality Harmful for the Environment in a Growing Economy?
Date
01.01.2005
01.01.2005
Authors
Hubert Kempf, Stéphane Rossignol
JEL Code
D31,O11,Q50,Q58
D31,O11,Q50,Q58
Keywords:
Inequality,Environment,Pollution abatement policy,Growth,Political economic
Inequality,Environment,Pollution abatement policy,Growth,Political economic
Publisher
Climate Change and Sustainable Development
Climate Change and Sustainable Development
Editor
Carlo Carraro
Carlo Carraro
In this paper we investigate the relationship between inequality and the environment in a growing economy from a political economy perspective. We consider an endogenous growth economy, where growth generates pollution and a deterioration of the environment. Public expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is done in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment: the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth.