Selangor, Malaysia – A group of researchers in Malaysia found that more equitable income distribution is resulting in better environmental quality in Thailand and Indonesia. However, in Malaysia, it has the opposite effect, while the two factors are unrelated in the Philippines.
The research team, led by Abdul Rahim Ridzuan, an economist at Universiti Teknologi MARA, analysed the effects of income inequality, economic growth, trade openness, domestic investment and energy consumption on carbon dioxide emissions in four South-East Asian countries from 1971 to 2013. They determined the importance of each factor using an analysis tool called an autoregressive distributed lag estimation.
They speculate that greater income equality enables a larger middle class to hold those in power accountable and demand policies that protect the environment. In contrast, when there is a greater economic gap, the rich have more influence than the poor on decisions that enable profits at the expense of the environment.
Even though Malaysia’s middle class is growing, the country still relies heavily on fossil fuels, which leads to greater environmental degradation. This surprised the researchers since Malaysia has committed to sustainable development goals in its national policy.
Climate change is linked to a high acceleration in carbon dioxide emissions since the beginning of the 20th century. Historically, developed nations are responsible for the majority of emissions. But as other nations grow their economies and consume more energy, they too are poised to contribute more carbon dioxide to the atmosphere unless they pursue more sustainable development practices that limit emissions.
An inverse U effect has previously been used to describe the relationship between economic growth and environmental quality. Low income predicts poor environmental health. As income rises the environment improves, but only to a point.
While many confounding factors influence environmental quality, income distribution can now be considered while making sustainable development policy, the researchers conclude in their study recently published in the Pertanika Journal of Social Sciences & Humanities. They plan to continue studying the relationship in other countries, particularly those known to produce high quantities of carbon emissions. – BusinessNewsAsia.com