The role of ethnic diversity in sustainable environmental growth: new evidence across different income regions

ABSTRACT

We examine the relationship between ethnic diversity and environmental quality, proxied by carbon dioxide ($\mathrm{C}{\mathrm{O}}_2$) emissions. Ethnic diversity is captured using indices of ethnic fractionalization. Adopting a supply-demand framework which introduces a model for economic growth, we find that ethnic fractionalization reduces $\mathrm{C}{\mathrm{O}}_2$ emissions. The negative effect of ethnic diversity on $\mathrm{C}{\mathrm{O}}_2$ emissions is also consistent across middle and low-income countries as well as high-income countries. However, results suggest that ethnic diversity has a negative effect on growth in middle and low-income countries, but a positive effect on growth in high-income countries. Our findings prove robust to alternative estimation methods.

KEYWORDS:

• Ethnic diversity
• environmental quality
• CO₂ emissions
• pollution

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ See further discussions in Ahlerup and Olsson (2012) as well as Michalopoulos (2012) on exogeneity and validity of instruments.