EKC Hypothesis Research Articles

Building a sustainable environment in EU countries: the critical role of infrastructure investments and institutional quality

ABSTRACT The literature on the intersection of environment and economic growth is extensive, and emerging research emphasizes additional variables that affect both domains. It is well known that institutional quality enhances environmental quality because institutions affect environmental quality and economic growth through regulatory policies. Moreover, infrastructure investment is a critical driver of growth and environmental improvement, providing the necessary foundation for change. This research contributes to the literature by examining the dynamic interaction between ecological footprint, infrastructure investment, institutional quality, and economic growth using the Environmental Kuznets Curve hypothesis for the 10 European Union countries with the highest levels of infrastructure investment from 1996 to 2020 to highlight how infrastructure and institutional quality affect environmental outcomes differently across countries. It finds long-run relationships among the variables in the Czech Republic, Finland, France, Germany, Hungary, Italy, Norway, Slovakia, Sweden, and Switzerland. The findings confirm the cointegration by confirming the EKC hypothesis for the panel and particularly for Finland, France, Norway, Slovakia, and Sweden. The study observes that increased infrastructure investments reduce the ecological footprint in Germany and Sweden but increase the ecological footprint in the Czech Republic and France. In Sweden, higher institutional quality significantly reduces the ecological footprint, suggesting that improvements in institutional quality are associated with a lower ecological footprint. These results provide a new perspective on the policy revisions required to achieve net zero emissions under the Paris Climate Agreement, emphasizing the need to integrate green finance into privately financed infrastructure projects.

Remittance and carbon dioxide emissions in the Southern African Customs Union region: Is there a modified environmental Kuznets curve?

The remittance-carbon dioxide (CO2) emissions nexus remains a hotly debated topic in the literature, with the majority of studies offering mixed conclusions. This study attempts to reconcile these disparities by investigating the nonlinear effect of remittances on the CO2 emissions in top-remittance receiving countries in Southern African Customs Union (SACU) region, using the modified Environmental Kuznets Curve framework which focuses on the effect that remittances might have on CO2emissions. The Cross-Sectional Autoregressive Distributed Lag (CS-ADRL) approach is applied to these top-remittance receiving countries from 1990 to 2020, representing a pioneering investigation for these countries. The finding of this study reveal that both the estimated coefficient of remittances and its quadratic term are statistically significant, with remittances displaying a positive coefficient and the quadratic term exhibiting a negative coefficient. This pattern confirms the presence of a modified EKC hypothesis, meaning as remittances increases, CO2 levels displays an unambiguous inverted U-shaped trajectory.

Investigating the determinants of marine environmental degradation in Africa: What roles can economy, population, capture and energy play?

This study firstly examines the quality of marine eco-environment in Africa using Tapio decoupling model, and analyzes the sustainability level of the development of “population agglomeration - marine environment - economic growth”. Secondly, a series of econometric tools, such as ARDL, FMOLS, AMG model and DH panel causality test, are used to investigate the long- and short-term impacts of economic growth, population agglomeration, marine capture and energy consumption on the African marine eco-environment, and to analyze the differences between the sub-regions in Africa. The results indicate that: Adebayo and Kirikkaleli (2021) (Adebayo and Kirikkaleli, 2021) the decoupling state of “population-environment” has shifted from expansive negative decoupling to more optimized strong decoupling, and “economy-environment” has gradually changed from strong negative decoupling and expansive negative decoupling to strong decoupling. Ali et al. (2017) (Ali et al., 2017) There existed a bi-directional causal relationship between the degree of marine environment degradation and economic growth, population agglomeration, marine capture and energy consumption. Al-Mulali and Sab (2012) (Al-Mulali and Sab, 2012) In the short term, the economic EKC hypothesis does not hold in North and West Africa, while Central, East and Southern Africa are consistent with the EKC hypothesis. In the long term, the EKC hypothesis is valid in Central, East and Southern Africa, while is not valid in North and West Africa. Overall, reducing population agglomeration levels, marine fishing and energy consumption might mitigate marine environmental degradation in Africa.

Does an environmental stringent policy really matter to achieve environmental sustainability in BRICS-T region? Evidence from novel method of moments quantile regression approach

Amidst pressing global environmental challenges, exacerbated by climate change and the imminent threat of global warming, there is a critical need to assess the efficacy of environmental policies. This study centers its attention on the pivotal role of these policies in addressing environmental concerns. Specifically, our research aims to scrutinize the impact of stringent environmental policies on environmental quality under the theoretical underpinnings of environmental Kuznets curve. To achieve this objective, the study collected data from BRICS-T economies over the period of 1990–2020. This study employed the method of moments quantile regression technique for empirical analysis. Our study validates the presence of the Environmental Kuznets curve (EKC hypothesis). Empirical findings reveal the sustained significance of environmental stringency across all quantiles, demonstrating a positive correlation in lower quantiles and a negative correlation in higher quantiles. At lower quantiles, the impact is insignificant initially, but pronounced due to efficiency improvements induced by stringent policies. The effects became negative at middle quantiles, indicating stringent policies might encounter diminishing returns where policy measures start stabilizing ecological impacts. At higher quantiles, the influence of ESI remains significant, reflecting ongoing adaptations in larger economies with higher ecological footprints. This suggests the potential effectiveness of stringent regulatory measures in mitigating environmental impacts and reducing ecological footprints. The identified inverted U-shaped curve signifies that while stringent policies may not inherently enhance environmental health, beyond a certain threshold, they can indeed contribute to its improvement. Our policy recommendation advocates for the widespread adoption and promotion of such stringent measures to safeguard environmental health.

Relationship among micro-pollutants, economic growth, renewable energy, nanotechnology and ecological foot prints of China: evidence from panel data analysis.

An important concern is the availability of clean drinking water, which is an essential need for human survival. This issue arises due to the existence of hazardous micropollutants originating from various emission sources. Nanotechnology aids in the mitigation of micropollutants by assimilating and counteracting their effects, hence diminishing their influence on water and other ecosystems. The study investigates the relationship between nanotechnological progress, the adoption of renewable energy, environmental consequences, and economic growth in China, using the Environmental Kuznets Curve theory as a conceptual framework. The study employs panel cointegration tests to analyze structural breaks from 2000 to 2020. Nanotechnology is expected to reduce environmental degradation and the presence of micro-pollutants by increasing the use of renewable energy and promoting energy conservation. Nanotechnology is crucial for mitigating micro-pollutants and advancing sustainable development in this specific context. However, the literature also highlights the harmful consequences of nanoparticle emissions caused by nanotechnology on human and environmental health for a long duration, requiring more examination. This research is the first empirical inquiry into the relationship between improvements in nanotechnology, the use of renewable energy, economic growth, and ecological effect, all within the context of the Environmental Kuznets Curve theory. The results confirm the successful incorporation of all components with a focus on long-term outcomes. The findings suggest that the EKC hypothesis is relevant in China. In China, advancements in nanotechnology have a moderating effect on environmental degradation. The use of renewable energy sources in China enhances environmental circumstances. Given the offered empirical evidence, it is advisable for the government to have a leading role in the development of innovative nanotechnologies that have low emissions of nanoparticles. By using this approach, it will be possible to encourage the conservation of energy and the use of renewable sources in a more secure way, hence improving the effectiveness of sustainable development initiatives.

Harnessing the synergistic impacts of financial structure, industrialization, and ecological footprint through the lens of the EKC hypothesis. Insights from Pakistan

In this era of globalization, each nation endeavors to attain sustainable growth by addressing environmental challenges. In recent decades, extensive human activities have significantly depleted natural resources, and the ecological footprint provides an effective measure to evaluate this impact. Therefore, by accounting for industrialization, urbanization, and export diversification and covering the dataset of Pakistan from 1985 to 2022, this research thoroughly analyzes the connection between financial structure and ecological impact. Another concern with the existing study is that most previous studies neglect the importance of the ecological footprint when assessing the financial structure as a source of environmental change. The dynamic Autoregressive Distributed Lag (DARDL) approach was applied to ascertain the empirical results. The findings indicate that financial structure exhibits an inverted U-shaped pattern in relation to the ecological footprint. It signifies that a pragmatic financial structure diminishes the ecological footprint. Moreover, industrialization and urbanization upsurge the ecological footprint while export diversification decreases. In the future, the government's duty to promote sustainable development should be reinforced by using eco-friendly technologies to ensure the proper sinking of financial resources and bolstering the role of the financial system in supporting sustainable development.

Environmental Sustainability in India: The Effects of Financial Development and Green Energy on Ecological Footprint

In this study, environmental sustainability is investigated through the ecological footprint variable in India from 1965 to 2018. In this context, the impact of renewable energy use, financial development, urbanization and economic growth on India's ecological footprint is analyzed. Since all variables were stationary at the first difference, the cointegration relationship between variables was tested with Gregory-Hansen and Hatemi-J cointegration tests. Empirical findings have shown that there is a long-term relationship between the variables in the relevant period. FMOLS, DOLS, and CCR estimators were used to determine the direction and magnitude of the effect of the explanatory variables on the dependent variable. The estimation results found that while economic growth increased the ecological footprint the most, financial development decreased the most. In addition, the increase in urbanization increases environmental degradation. However, although the use of green energy is not at the desired level, it increases the environmental quality. On the other hand, the study tests the EKC hypothesis for India. Research results support that there is an inverted-u-shaped relationship between economic growth and ecological footprint. Therefore, for India, whose GDP is integrated with fossil fuels, higher growth at the beginning causes more fossil fuel use and negatively affects environmental quality. On the other hand, increasing urbanization in India, which has an underdeveloped energy infrastructure, increases environmental degradation. However, increasing renewable energy and financial development offer significant opportunities to reduce the ecological footprint.

Retraction Note: Environmental regulation, renewable electricity, industrialization, economic complexity, technological innovation, and sustainable environment: testing the N-shaped EKC hypothesis for the G-10 economies.

Retraction Note: Environmental regulation, renewable electricity, industrialization, economic complexity, technological innovation, and sustainable environment: testing the N-shaped EKC hypothesis for the G-10 economies.

Testing the ecological footprint of economic growth in developing countries. The case of Vietnam

AbstractThis study focuses on the relationship between economic growth and environmental degradation, by testing the Environmental Kuznets Curve hypothesis in Vietnam, a main export‐oriented country that features a long period of economic growth. The main originality of this work is that, unlike previous studies, it uses ecological footprint as the main indicator for environmental degradation. This allows to reconsider the results from previous studies that only focus on CO2 emissions performances. The cointegration between the analysed variables is investigated using the autoregressive distributed lag (ARDL) approach. To determine the parameters of the Environmental Kuznets Curve in the sample, this work additionally analyses long‐ and short‐run estimations. The paper shows that the EKC hypothesis holds in the long term for Vietnam when using ecological footprint. Nevertheless, it also shows that not only growth but also primary energy consumption contributes to increased environmental destruction. An active ecological policy and the decrease of fossil energy use seem necessary to allow Vietnam to keep a high level of economic growth and reduce environmental degradation.

Application of the environmental Kuznets curve hypothesis in the Indian core industries: Towards a greener economy

AbstractThe study investigates the long‐term effects of two core industries of India, namely crude oil and electricity on the environment by adopting the industry‐specific environmental Kuznets curve (IEKC) hypothesis. While crude oil is high‐polluting, the impact of the electricity industry on the environment is less severe. A traditional EKC hypothesis, described by an inverted U‐shape, demonstrates the relationship between economic growth and environmental degradation. The study tests IEKC individually for each of the two industries for time series data ranging from 1994 to 2021 for the crude oil industry and from 1994 to 2019 for the electricity industry. Carbon dioxide emission levels and the Index of Eight Core Industries are the indicators used to measure the environmental degradation and industrial growth levels, respectively. The study adopts autoregressive distributed lag approach to test the IEKC hypothesis. The findings suggest rejecting the IEKC hypothesis in the Indian crude oil industry, indicating its long‐term adverse environmental effects. In contrast, acceptance of the hypothesis in the electricity industry confirms that electricity energy can potentially lower the country's pollution level in the long run. The study adds to the existing literature by applying the IEKC hypothesis in the core industries of India to judge their environmental sustainability.

Economic complexity, greenfield investments, and energy innovation: policy implications for sustainable development goals in newly industrialised economies.

The crucial role of environmental assessment quality has been recognised by environmental and sustainable development goals in addressing climate change challenges. By focusing on the key identifier of environmental assessment, progress can be made towards overcoming climate change issues effectively. The current study considers environmental commitments under COP28 to study the role of economic complexity, greenfield investments, and energy innovation in environmental degradation in newly industrialised economies from 1995 to 2021. We employ novel panel estimations from CS-ARDL, CS-DL, AMG, and CCEMG to confirm that economic growth and greenfield investments degrade environmental quality. On the other hand, energy innovation and urbanisation improve environmental sustainability. Lastly, we confirm the EKC hypothesis for economic complexity as well. Given the reported empirical findings, the study suggests policymakers must focus on economic complexity to transform industrial sectors' economic potential. Furthermore, foreign investment projects must be linked with environmental goals to increase renewable energy capacity.

Integrating fintech in natural resource management: Assessing the EKC hypothesis for sustainable development in E7 countries

The main objective of the study is to examine the impact of green finance, fintech and mineral resources on environmental sustainability is of great importance in the E7 nations namely Brazil, China, India, Indonesia, Mexico, Russia, and Turkey. The E7 countries are selected as these countries are mineral rich countries and account for a major portion of global mineral export. The data of twenty-five years spanning from 1998 to 2022 is used for the analysis. The study has employed the three measures namely carbon dioxide emissions, ecological footprint, green economic growth to conceptualize the sustainable growth. For the data analysis the study has employed the nonlinear auto-regressive distributed lag (NL-ARDL) model. The results of the study highlights that encouraging and promoting the green finance, and fintech in E7 countries promote sustainable growth, by reducing CO2 emission, improving economic growth, and reducing ecological footprints. The results of the study are in line with the proposition of EKC hypothesis. Moreover, the results of the study also highlight that mineral resource abundance have significant impact of environment sustainability. The study suggests that E7 countries should establish dedicated funds or subsidies to help businesses transition to green technologies and practices, especially for small and medium-sized enterprises. Fintech is seen as a transformative tool in advancing environmental sustainability by improving financial service efficiency and offering new green investment platforms in E7 countries. This could help mitigate initial costs associated with green technology adoption.

How does economic policy uncertainty impact CO2 emissions? Investigating investment's role across 22 economies (1997–2021)

Economic policy uncertainty (EPU) has significant implications for both economic growth and CO2 emissions through investment and consumption. Existing research has produced mixed findings on the impact of EPU on CO2 emissions. Nevertheless, there is a need for further empirical investigation into the role of investment in the relationship between EPU and CO2 emissions in various economies. This article contributes to the literature by examining the investment channel in the EPU-CO2 emissions nexus in 22 economies using annual panel data from 1997 to 2021. The analysis was conducted using eight specifications to classify the empirical estimates of the direct and indirect impacts of EPU on CO2 emissions through the investment channel. The CD test, CADF test, and CIPS test were used to test for cross-sectional dependence, unit root, and cointegration, respectively. The GMM estimation technique was used to test for the long-run relationship. The empirical results suggest that both direct and indirect EPU stimuli on CO2 emissions through the investment channel are positive, and the EKC hypothesis holds. Furthermore, findings show that fossil-fuel energy usage leads to an increase in CO2 emissions. Given the significant impact of economic policy uncertainty on CO2 emissions, policymakers should consider the environmental implications of their policy decisions. Second, reducing fossil fuel energy usage in the production process should be a priority to mitigate the impact of EPU on CO2 emissions.

The Long-Run Linkage among the Macroeconomic Factors and CO2 Emissions in terms of Sea Transport Induced EKC Hypothesis in USA

The main aim of this article is to comprehend the long-run relationship among sea transportation, energy use, GDP, and CO2 for USA from 1980 to 2023. In this sense, FMOLS, DOLS, CCR, and ARDL analyses are employed in order to investigate the entity of long-run linkage between the relevant variables. According to results of this manuscript, except energy use there is no both long-run relationship among variables and effects of independent variables (GDP, sea transportation) on dependent variable (CO2 emissions) from 1980 to 2023 in USA. Therefore, the sea transport-induced EKC hypothesis has not been confirmed empirically. Although the hypothesis has not been confirmed, there are some issues to consider in terms of energy consumption. Transportation energy consumption and greenhouse gas emissions are seen as an alarming threat to leaving a livable and sustainable green environment and economy to future generations. Fossil fuels used in transportation have an important place in carbon dioxide emissions. This is seen as a crucial environmental factor that all stakeholders should consider when planning energy and environmental policy decisions. In order to prevent environmental quality from being negatively affected by greenhouse gas and exhaust emissions, policy makers need to encourage more energy efficient and healthier transportation ways. Thus, the harmful effects of transportation energy consumption can be reduced as well.

The role of environmental tax on the environmental quality in EU counties: evidence from panel vector autoregression approach

This study intends to analyze the influence of environmental taxes on pollution in EU-27 nations. Furthermore, energy from renewable sources consumption and urbanization are employed to clarify CO2 emissions in this study that tests the EKC hypothesis. According to the findings, an increase in environmental taxes reduces CO2 emissions by 0.14%. Also, the data supported the validity of the EKC concept. The findings of the causality test demonstrated that there is a bidirectional causal link between CO2 emissions and environmental taxes. These results reflect that environmental tax revenues contribute to sustainability as an effective policy tool in EU countries. Policies regarding environmental tax enforcement come to the fore in terms of both keeping the balance in economic activities and serving sustainability.

Thriving or Declining? Unraveling Corruption, Environmental Quality, Energy Consumption, and Economic Growth in ASEAN Countries

The current study is carried out to explore the link between Corruption, Environment quality. Energy consumption and economic growth in selected Asean countries. In addition to that, the present study aims to highlight the direct impacts of corruption upon environmental degradation, energy consumption, and economic progress. For this purpose, the analytical framework has been particularly used. Theoretically, environmental quality is expected to be directly influenced by corruption using taxation and regulations, while corruption affects economic growth which in turn affects the quality of environment. Therefore, economic growth is negatively influenced by the levels of corruptions. The higher the levels of corruption the lower will be the GDP level of an economy. This lower GDP level then influences the environmental quality, and thus confirms the EKC hypothesis. This paper has employed cointegration model for analyzing the association between environmental quality, energy consumption, corruption, and economic growth for the data involving 5 ASEAN countries i.e. Malaysia, Thailand, Singapore, Philippines, and Indonesia for the years 1960-2021. The literature review has shown no empirical study that have employed cointegration model for examining the effects of corruption on energy consumption, environmental quality, and economic growth. The findings of the study are in line with the proposed hypothesis. The study which is among the pioneering studies will be helpful for policymakers and researchers.

Equal Educational Opportunities: A Catalyst for Sustainable Economic Development

The study holds significance in revealing how ensuring fair access to education can fuel economic growth, promote social cohesion, and guide policymaking for sustainable development. The objective of current research is to empirically examine the relationship between gender disparity in educational attainment within social, and ecological systems. The data is collected for the period 1990-2022. In the presence of cross-sectional dependence 2nd generation unit root test is applied. CS-ARDL technique is considered to examine the short-run as well as the long-run relationship between Gender disparity in education and the socio-ecological system. Achieving environmental sustainability and minimizing our ecological footprints depend critically on gender parity in education. Equal access to high-quality education gives women the knowledge, analytical abilities, and self-assurance to stand up for their communities and themselves. Findings describe that in the long run, there is a statistically significant negative correlation between the GINI-Coefficient and school enrollment tertiary and School enrollment primary. This indicates that, over time, a decrease in income disparity is linked to an increase in enrolment in primary and postsecondary education. In the long run, the GINI-Coefficient and Secondary school enrollment has a positive and statistically significant relationship. The data in Model 2 appear to indicate that the relationship between education and environmental sustainability is more intricate than the EKC hypothesis predicts. Higher education can raise one's knowledge and understanding of environmental issues, but it can also increase consumption and have an adverse effect on the environment. The findings of the study suggest that implementing policies with the goal of removing obstacles to education based on gender. This could entail giving families financial incentives to send their daughters to school and making sure that all genders have access to high-quality education.

Retraction Note: The role of monetary and fiscal policies in determining environmental pollution: Revisiting the N-shaped EKC hypothesis for China.

Retraction Note: The role of monetary and fiscal policies in determining environmental pollution: Revisiting the N-shaped EKC hypothesis for China.

The impact of agriculture, energy consumption and economic growth on ecological footprint: testing the agriculture-induced EKC for Türkiye

AbstractThe main purpose of the current study is to empirically analyze the impact of agriculture, energy consumption, and economic growth on environmental degradation in Türkiye for the period of 1968–2020. Against the backdrop, we tested agriculture-induced EKC hypothesis employing Ecological Footprint (EFP) instead of emissions because EFP better represents the sustainability. Our results from ARDL model indicate the validation of the EKC hypothesis for Türkiye. Hence environmental deterioration worsens with economic growth and improves with higher level of GDP. Moreover, increase in both the agricultural value added per capita and energy use per capita increases the EFP per capita. In other words, agricultural production, and energy usage are important drivers for environmental quality. The causality results show the presence of growth hypothesis between agriculture and GDP and energy-EFP for Türkiye. Therefore, government should envisage the policies towards sustainable economic growth as discussed under the conclusion part.

Analysing the Role of Globalisation in Environmental Degradation of West African Countries: A Method of Moments Quantile Regression Approach

Abstract Motivated by the need to achieve a sustainable environment as entrenched in the Sustainable Development Goals and the conflicting evidence in the literature, this study scrutinises the effect of different components of globalisation on the environmental degradation of West African nations within the Environmental Kuznets Curve framework. Fully modified ordinary least squares, dynamic ordinary least squares, and the method of moments quantile regression of Machado and Silva (2019) are deployed as the estimation techniques. In the panel, cross-sectional dependence and non-normality are established. The findings from the quantile regression reveal a significant positive impact of economic growth on environmental degradation. The square of economic growth has an insignificant negative influence on environmental degradation. Thus, the EKC hypothesis is not valid in West African nations. Aggregate globalisation significantly influences environmental degradation, while economic and political globalisation significantly negatively impacts environmental degradation across the quantiles. However, social globalisation negatively impacts environmental degradation at a lower quantile (10–50 %), while at a higher quantile, the impact is positive. Natural resources significantly affect environmental degradation, while energy consumption in the region benefits the environment. Nevertheless, urbanisation has a different impact on environmental degradation in the area. The results of these studies are robust to other methods of estimation. The implications of the study are discussed.