Validation of the environmental Kuznets curve hypothesis and role of carbon emission policies in the case of Russian Federation.

Abstract

Climate change currently observed and expected in the future is associated with risks to security and sustainable development and natural and irreversible consequences. To minimize these risks, it is necessary to adapt the public administration, economic sectors, and regional infrastructure to the changing climate conditions. This paper discovers the links between CO2 emissions and their key determinants such as economic growth, energy consumption, population, trade openness, and financial development including the period from 1990 to 2020 to test the environmental Kuznets curve (EKC) hypothesis by using ARDL bound test for the Russian Federation. Findings reveal that energy consumption and population have a positive impact on CO2 emissions, while economic growth, financial development, and trade openness have been found to decrease CO2 emissions in the long term. The results of this paper show that there is a “U”-shaped relationship between CO2 emissions and economic growth in the Russian Federation. This shows that EKC is valid up to a certain income level in the Russian Federation, and when this income level is exceeded, a positive relationship will begin between economic growth and environmental degradation. As a policy implementation, policymakers must implement clean energy technology policies to achieve the 2060 net zero carbon target. Policies such as fossil-based energy use and reducing energy intensity should be adopted.