Investigating the Role of Natural Resource Depletion and Consumption Expenditures in Escalating Carbon Inequality

ABSTRACT Carbon inequality has become a significant challenge for sustainable natural resource management and global environmental sustainability. This study aims to explore the impact of natural resource depletion on carbon inequality, using data spanning from 1990 to 2020 for both developed and developing countries. The study employs sophisticated econometric methods for empirical analysis, such as second‐generation cointegration techniques, AMG, CS‐ARDL, the quantile regression method, and the Dumitrescu and Hurlin causality test. The findings reveal that natural resource depletion and consumption expenditures increase carbon inequality in the overall sample of countries. However, in a separate sample, natural resource depletion and consumption expenditures increase carbon inequality in developing countries, while they have a decreasing impact in developed countries. In addition, globalization and population growth emerge as significant contributors to carbon inequality in all three groups. In the quantile regression analysis, the results are the same at both the lower and higher quantiles in all three groups, except for natural resource depletion at the upper quantile. The causality analysis also supports the econometric findings. Based on these results, policy recommendations are proposed for both developing and developed countries. These include encouraging sustainable resource management, renewable energy infrastructure, sustainable consumption, environmental considerations in economic policymaking, technology transfer, and sustainable urbanization. These proposals may reduce carbon disparity, promote sustainable growth, and create a ecologically sustainable future.