Relating Environmental Performance of Nation States to Income and Income Inequality

The paper explores a number of ways in which environmental quality can be represented by indicators within empirical attempts to look for a relationship between environmental performance, income and income inequality. A total of 16 environmental performance indicators were selected where data were available at the national scale (180 countries), all of which were components of the Environmental Performance Index (EPI) published in early 2016, and included as dependent variables with income/capita (GDP/capita) and distribution of income (Gini coefficient) spanning nearly 20 years as independent variables. Data were analysed using Principal Components Regression. The results generate a rather complex picture whereby some of the EPI component indicators, notably those in the Environmental Health’ category, have a relationship with income and income distribution while others, especially those centred on ‘Ecosystem Vitality’ do not. The paper provides some of the first published evidence for a relationship between environmental performance and income distribution and discusses some of the possible causal factors.