Carbon Dioxide Emission and Income: A Temporal Analysis of Cross- Country Distributional Patterns DIPANKOR COONDOO Economic Research Unit, Indian Statistical Institute, Kolkata 700108, India. SOUMYANANDA DINDA * S. R. Fatepuria College, Beldanga, Murshidabad, West Bengal, India . 2005 Abstract The existence of a cointegrating relationship between income and CO 2 emission for individual country-groups suggests existence of a corresponding relationship between the inter-country disparities in the levels of income and CO 2 emission. This paper explores the relationship between the patterns of cross-country distribution of income and CO 2 emission and temporal shifts in such a relationship. This paper also examines how the mean level of per capita CO 2 emission and its distributional inequality are related to the corresponding mean income level and the distributional inequality of income. The analysis is based on a cross-country panel data set at the level of country-group. Environmental quality demanded is treated as a private good and not as a public good as done in most other studies. The technique of Lorenz and specific concentration curve analysis are used as the basic analytical framework to argue that a measure of relative distributional inequality of income should be used as an explanatory variable in the Environmental Kuznets Curve (EKC) relationship along with the mean income level. In the empirical exercise, Johansen’s cointegration analysis technique is used to explore existence of statistically significant cointegrating vector(s) relating mean level of emission and Specific Concentration Ratio ( SCR) of emission to mean income level and Lorenz Ratio (LR) of income. The empirical results confirm that the pattern of cross-country income distribution has significant effect on the mean level of emission for all the country-groups considered. JEL Classification Number : C22, Q25, O10. Keywords : Cointegration, Distribution, Emission, EKC, Inequality, LR and SCR. --------------------- *Corresponding Author: c/o Dipankor Coondoo, Economic Research Unit, Indian Statistical Institute, 203, B. T. Road, Kolkata-108, India. E-mail: sdinda2000@yahoo.co.in and s_dinda@hotmail.com , Fax No: 91-033-2577-8893.