Comparison of the Effect of Income Inequality and Petrol Quotas onCarbon Dioxide Emissions in Iran

Income distribution and environmental destruction are two of the most critical sustainable development goals.however, the linkage between income inequality and carbon emissions remains controversial, especially incountries with natural oil and gas resources. this paper studies the link between carbon dioxide (co2)emissions and income inequality in iran from 1985 to 2020. the modeling results indicate a trade-off betweenincome inequality and co2 emissions. the vector autoregression approach found a direct relationship betweenthe gini coefficient and co2 emissions and an indirect relationship between petrol price and co2 emissions.petrol prices have a smaller, although negative, impact on co2 emissions compared to the positive effect ofinequality. impulse response was checked out to investigate the effect of shocks. according to the variancedecomposition, income inequality after carbon dioxide emissions is the most explanatory change in gasemissions, among other variables. this paper presents a positive effect of petrol price shocks on carbon dioxideemissions and a negative impact on long-term carbon dioxide emissions.