Investigating whether the environmental Kuznets curve hypothesis holds for sectoral CO2 emissions: evidence from developed and developing countries.

Abstract

Carbon dioxide (CO2) emissions entail a key component of greenhouse gases (GHGs) and are crucial for global warming and climate change issues. Although the environmental Kuznets curve (EKC) pattern of the emissions–income nexus has intrigued many researchers for a long time, few studies cover a wide range of economic sectors and a large number of countries, which calls for the re-investigation of sector-wise EKC arguments. Thereby, we investigate the long-run equilibrium relationship between CO2 emissions and per capita income in a panel of 86 developing and developed countries for the period from 1990 through 2015. Our findings show that the EKC holds for three sectors: the electricity and heat production sector, the commercial and public services sector, and the other energy industry own use sector with the turning points of approximately 21,000 USD, 3000 USD, and 5000 USD, respectively. Additionally, emissions decrease monotonically for the manufacturing industries and construction sector, the residential sector, and the agriculture, forestry, and fishing sector, whereas they increase monotonically with the development of the transport sector. Policymakers should consider adopting sector-specific environmental policies based on each sector’s unique income–emission relationship, to mitigate CO2 emissions effectively, and attain sustainable economic growth.