Investigating the energy-environmental Kuznets curve

Abstract

Abstract This paper investigates the relationship between absolute energy consumption and gross domestic product (GDP) per capita for 113 countries over the period 1971–2004. Energy has been scarcely explored in the Environmental Kuznets curve (EKC) debate and is taken as the indicator of overall environmental pressure. The following aspects of this work are rather innovative. Firstly, in order to closely adhere to the EKC narratives, the indicator of environmental pressure (energy) is taken in absolute terms rather than per capita. Secondly, we look for consistency both between different econometric techniques (parametric and semi-parametric) and across different analytical levels (world, time series/cross-countries, and single countries). Finally, the dataset is large and not limited to developed countries. In our opinion, the estimates cannot support an energy-EKC hypothesis. For the world as a single unit, the relationship is positive monotone, with a lower (though still positive) elasticity after 1989. A glance at single country level does not reveal evidence of EKC. Cross-country analysis is slightly more open to interpretation; in any case, however, it shows that the potential benefits of GDP growth on natural environment, if any, did not show up in the considered time span.