The Interplay between Carbon Emissions and Inequality: A Complex Networks Approach

The sustainable development process faces two key challenges: income inequality and
carbon emissions, but the relationship between them is still unclear. This study
analyzes the interrelations between greenhouse gas emissions (GHG) and income
inequality across European countries, using the Sustainable Development Goals (SDG)
framework. First, the main determinants of greenhouse gas emissions are identified
through a Random Forest analysis, then two inequality groups are created via cluster
analysis based on SDG1 and SDG10. Then, two complex networks are constructed
based on the two inequality groups and the main emission determinants to determine
the most relevant factors influencing each group's impact on global emissions.
Our research reveals significant differences between countries with low and high levels
of inequality. In the high-inequality group, productivity and emissions are negatively
correlated, whereas, in the low-inequality group, the relationship is positive. This
trade-off indicates that countries with lower inequality tend to have greater energy
efficiency, but improvements in quality of life lead to higher consumption levels,
influenced by the Marginal Propensity to Emit and consumer status levels. The
negative relationship in the high-inequality group suggests a potential income
threshold where productivity increases reduce emissions due to energy efficiency
offsetting consumption increases. In agricultural activities, countries with higher
inequality see a positive impact on emissions, whereas in countries with lower
inequality, agriculture tends to be more productive with lower emissions. In countries
with higher inequality, increased government investments are associated with higher
emissions. Conversely, in countries with lower inequality, investments tend to align
with efforts toward a zero-carbon economy, showing a negative correlation with
emissions.