Effects of Environmental Unsustainability on Income Inequality: A Panel Data Analysis

The main goal of this research is to empirically examine how environmental unsustainability influences income disparity. Utilizing globally aggregated data and panel data analysis methods, the relationship between environmental indicators such as carbon emissions, natural resource depletion, deforestation, and climate change and the Gini coefficient is examined. When the analyses are performed individually for developed and developing nations, the results indicate that environmental degradation intensifies income inequality to a greater extent in developing countries compared to developed ones. Based on the results obtained through the fixed effects model and the panel ARDL approach, it is determined that environmental degradation has a statistically significant and long-term exacerbating effect on income inequality. Granger causality tests indicate that environmental indicators have a unidirectional impact on income distribution inequity. However, the literature review suggests that this relationship is often examined as bidirectional. The findings of this research highlight the necessity of evaluating environmental and social policies in an integrated manner. In light of these results, it is recommended that environmental protection policies be shaped based on principles of fair and inclusive development to prevent the deepening of social inequalities.