The role of legal system quality in carbon inequality: Mixed evidence from middle-income economies

Addressing the challenge of unequal contributions to global carbon emissions is central to advancing sustainable development. This study examines how globalisation, economic growth, and the quality of legal systems influence CO₂ emissions inequality across 78 middle-income economies, utilising balanced panel data from 2000 to 2019. To provide further nuance, this analysis also distinguishes between 39 lower-middle-income and 39 upper-middle-income countries. Employing Driscoll-Kraay Standard Errors and Feasible Generalised Least Squares estimation techniques, the results reveal that globalisation mitigates emissions inequality, while economic growth amplifies it. The quality of the legal system exerts complex and divergent effects. In lower-middle-income economies, judicial independence, impartial courts, and stronger protection of property rights reduce carbon inequality. By contrast, in middle- and upper-middle-income economies, enhanced judicial independence, impartiality, and system integrity are associated with greater carbon inequality. Robustness checks using Pooled Mean-Group Autoregressive Distributed Lag models confirm these baseline results. Overall, the findings highlight the dual role of economic integration and institutional quality in shaping carbon inequality across diverse development contexts.