How income inequality drives climate inequality in the world's largest emitting nations: Novel evidence from multivariate quantile-on-quantile and wavelet quantile methods

Income inequality and climate inequality represent critical, interconnected challenges on a global scale, particularly within the world’s top-emitting nations, which bear substantial responsibility for addressing these dynamics. This study investigates the relationship between income inequality and climate inequality over the period from January 1980 to December 2023, employing advanced quantile-based methodologies to reveal nuanced, nonlinear interactions across temporal spans and distributional levels. Specifically, Multivariate Quantile-on-Quantile Regression (MQQR) and Wavelet Quantile Regression (WQR) are utilized to model complex patterns, while Instrumental Variable Quantile Regression (IVQR) mitigates potential endogeneity. Robustness is further ensured through Multivariate Quantile Regression (MQR) and Kernel-Based Regularized Least Squares (KRLS). Findings indicate heterogeneous relationships across countries. China and Russia show U-shaped patterns: moderate income inequality reduces emissions inequality, but extreme disparities worsen it, while Germany’s mitigation effects weaken at higher quantiles. India exhibits a distinct W-shaped linkage, with emissions inequality sensitive to both low- and high-income disparities. Japan and the U.S. display threshold-driven transitions, where income inequality shifts from reducing to exacerbating climate inequality over time. Temporal analysis highlights diverging trajectories: emissions inequality intensifies with income gaps in China, India, Japan, and Russia, whereas Germany’s policies curb this trend, and the U.S. transitions from short-term reductions to long-term increases. The results underscore the urgency of adaptive, income-targeted climate policies—such as progressive carbon pricing, inclusive green technology investments, and inequality-sensitive regulations—to align economic equity with decarbonization in high-emission economies. • Examine the asymmetric nexus between income inequality and climate inequality. • Uses data between 1980/m1-2023/m12 and applies quantile-based methods. • At low quantiles, income inequality reduces climate inequality. • At high quantiles, income inequality increases climate inequality.