Rethinking the environmental Kuznets curve hypothesis across 214 countries: the impacts of 12 economic, institutional, technological, resource, and social factors

Abstract

Research over the past three decades has provided rich empirical evidence for the inverted U-shaped EKC theory, but current problems facing advancing climate mitigation actions require us to re-examine the shape of global EKC rigorously. This paper examined the N-shaped EKC in a panel of 214 countries with 12 traditional and emerging variables, including institutions and risks, information and communication technology (ICT), artificial intelligence(AI), resource and energy use, and selected social factors. The two-dimensional Tapio decoupling model based on N-shaped EKC to group homogeneous countries is developed to explore the inter-group heterogeneous carbon emission effects of each variable. Global research results show that the linear and cubic terms of GDP per capita are significantly positive, while the quadratic term is significantly negative, regardless of whether additional variables are added. This means the robust existence of an N-shaped EKC. Geopolitical risk, ICT, and food security are confirmed to positively impact per capita carbon emissions, while the impact of composite risk, institutional quality, digital economy, energy transition, and population aging are significantly negative. The impact of AI, natural resource rents, trade openness, and income inequality are insignificant. The inflection points of the N-shaped EKC considering all additional variables are 45.08 and 73.44 thousand US dollars, respectively. Combining the turning points and the calculated decoupling coefficients, all countries are categorized into six groups based on the two-dimensional decoupling model. The subsequent group regression results show heterogeneity in the direction and magnitude of the carbon emission impacts of most variables. Finally, differentiated carbon emission reduction strategies for countries in six two-dimensional decoupling stages are proposed.