INCOME INEQUALITY, A THREAT TO ENVIRONMENTAL SUSTAINABILITY

While much attention in recent years has been focused on the relationship of income inequality with economic growth and social development, its relationship with environmental sustainability has remained relatively unexplored. Yet, there is now considerable empirical evidence showing that income and wealth inequality can be harmful for environmental sustainability. Widening income disparity and environmental deterioration in relation to economic growth have increasingly become pressing issues of our concern.

I found and drew some mechanisms that may explain the observed correlation by identifying three channels through which income inequality may influence environmental outcomes. These are:

1.      Household

2.      Community

3.      National (with an extension to international)

The household channel of causality operates mostly through the consumption behavior. For example, the rich generally pollute more, simply because they consume more. However, the household channel may work through the investment behavior too.

The community channel works via income inequality’s negative influence on the mobilization of collective efforts necessary for the protection of common property resources (CPR), which often are also the environmental resources. This issue has become more important in view of climate change mitigation and adaptation, both of which require collective efforts on the part of communities. Noteworthy, Successful mitigation and adaptation efforts require cooperation at the global, national, sub-national, and community levels. The cooperative effort is particularly vital for communities that live at the frontier of the climate change impact. For example, many islands and low lying countries are getting partly submerged, and the people living in these areas have to migrate or put up resistance to the processes and/or adapt to the new situation. While migration can be an individual response, resistance and adaptation require collective effort. Similarly, in many areas, climate change is drying up water bodies which are crucial for the survival of local communities. Again, collective efforts are necessary in those places to resist and adapt. Also, experience shows that orderly migration requires collective action by both the migrants and the host population to which migrants are moving. However, cooperation and collective efforts becomes difficult when the members of the community are very unequal. Higher inequality hinders crystallization of a common purpose and creates obstacle to trusting relationship among the community members. Thus, by facilitating collective efforts, the reduction of inequality can help communities in confronting and coping with climate change.

The national channel works via income inequality’s impact on national decision making. The rich, despite being a small social group in terms of number of people, can often skew national decision making towards their narrow interests, which may be more aligned with policies that are detrimental to the environment. Also, inequality of political power arising from income inequality may allow the rich to dump pollution on the poor and weak while insulating themselves from the consequences of pollution in various ways. As a result, income inequality may cause a society to have a higher aggregate level of pollution than would have been possible in a more equal society.

The international channel works under the survival for the fittest in this capitalistic era, and the economically stable countries obviously leave more carbon footprints compared to the less economically stable countries. The partnerships of the international community would however accomplish an enormous work in bridging the economic gap to address the most pressing environmental needs. The governments of the high income countries, the largest emitters of all income groups, may need to cope with the issue by devising policies that seek a proper link between development and environment as the government’s dual role of redressing income inequality while reducing CO2 emissions involves complex procedures for policy formulations especially for high income countries.

Summarily, these inter-related channels through which inequality impacts the environment are interconnected, i.e. household, community, national (and international) channels. The household channel works mainly through the consumption behavior. The rich tends to consume and pollute more than the poor, and hence redistribution of income in favor of the poor households has the potential to be more favorable for the environment. The community channel works through the role of equality in facilitating collective effort necessary for the protection of common property (environmental) resources. At the national level, the reduction of inequality can create a more level playing field that is conducive to the adoption of more pro-environment policies. At the international level, more equal distribution of economic and political power among countries can make it easier to mobilize the global effort necessary to confront the global environmental problems, including the important problem of climate change. These different channels do overlap and thus can amplify the beneficial impact of reduction of inequality on environmental outcomes.

All in all, what is required is collective confrontation of the environmental loss in a more shrewd way, and it requires holding hands so no one is left behind. It’s a win win after all.

LET’S GET TO WORK