Do Urbanization and Energy Consumption Change the Role in Environmental Degradation in the European Union Countries?

Abstract

Nowadays, increased urbanization is visible in most European Union countries. At the same time, it can be noticed that in the studied period (2000–2018), GDP per capita increased, and CO2 emissions per capita and energy consumption per capita decreased. These trends should be assessed in an unequivocally positive way. Considering these trends, especially with regard to economic development, our research goal is to answer the following questions: is there a long-run relationship between urbanization, energy consumption, economic growth, and carbon dioxide emissions, and what roles do urbanization and energy consumption play in the concept of the environmental Kuznets curve? This study aims to contribute to this growing area of research by exploring the European Union countries in the period covering the accession of new member states from Central Europe that needs intensifying European environmental policy. In order to test cointegration, we used Pedroni and Westerlund’s panel tests. To estimate the long-run coefficients, we employed the FMOLS, MG, CCEMG, and AMG tests. Our findings confirmed the long-run relationship between variables. We find that urbanization has a high negative impact on carbon dioxide emissions per capita. Interestingly, our studies’ results differ from those in most of the previously published articles about European countries. For this reason, our results provide a new insight for policymakers in European Union institutions.