Abstract
This research analyzes the Peruvian engagement against climate change through the impact of the per capita income on the environmental pollution in the national scenario during the annual period of 1980-2019. For this, the logic of the Environmental Kuznets Curve will be used, in which an "inverted U" curve shape affirms that the economic growth is favorable for the environment in the long term because an optimal income point is reached and pollution begins to decline. For this analysis, the national exports are included as a third variable, and also is considered a cubic regression equation to the original Kuznets model. Through the estimation by Dickey-Fuller and Phillips-Perron unit root tests, Granger Causality Test, the Vector Autoregression Model (VAR) method and the Forecast Graphics, it is shown that, similar to other countries of the region, Peru is actually on the initial part of the curve, where income and pollution have a growing direct relation. Finally, the models that fitted the relationship of these variables were the original model and the model with exports included.
Highlights
Peru’s economic growth over the last 40 years has generated greater extraction of national natural resources, affecting more environmental quality
The following research is important because its purpose is to study the type of relationship between economic growth and environmental pollution based on the Kuznets Environmental Curve for Peru, during the period 1980-2019, given the increase in carbon dioxide emissions and concern for environmental wellbeing at the national level (Ministerio del Ambiente del Perú, 2011)
The results are displayed in Table 1: For both Dickey-Fuller and Phillips-Perron Tests, it is obtain that the three variables in study (LCO2t, LGDPt, LEXPORTSt), on its level, has a p-value greater than 5% significance level
Summary
Peru’s economic growth over the last 40 years has generated greater extraction of national natural resources, affecting more environmental quality. The following decade, 2000-2009, the average annual growth rate was 5.6%, and in the years 2010-2019 it was 4% (Ministry of Economics and Finance, 2020) This entire economically favorable scenario for Peru is due to an increase in extractive activities (agriculture, livestock, fishing, manufacturing and extraction of oil, gas, minerals, among others), affecting the preservation of our biodiversity and contributing to environmental deterioration. Several researchers decided to use an accessible methodology that would demonstrate the relationship between these variables, both in the short and long term, through the Environmental Kuznets Curve (Grossman and Krueger, 1995) This theory proposes an inverted U relationship between economic growth and environmental deterioration, since as economic growth increases, environmental deterioration has the same behavior; there is a turning point where this direct relationship becomes inverse, and environmental degradation begins to diminish while economic growth continues its course. Developed countries had already reached the turning point and showed a decrease in pollutants while there was economic growth; this was not the case in most developing countries, as many of them are still in the first part of the curve (Vergara et al, 2018)
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