EKC Hypothesis Research Articles

Impact of subsectors of agriculture and economic growth on CO2 emissions in Pakistan: evidence from Environmental Kuznets Curve.

Modernization produces carbon dioxide (CO2) emissions but is also able to achieve sustainable agriculture growth by introducing the concept of renewable energy into the agriculture sector, and through this process reduce the CO2 emissions in the country. The main objective of this research is to check the environmental Kuznets curve hypothesis with CO2 emissions and economic development in renewable energy and agriculture subsectors such as fisheries and crop production in Pakistan. This study covers the time period 1984 to 2020. We have applied the autoregressive distribution lag (ARDL) bound test. The results indicate the existence of long-term association among all variables in the model. The result of co-integration in the short run shows a negative relationship between CO2 emissions and crop production in the current time period, and it shows a positive correlation with the first lag of CO2 emission, which means that current crop production reduces the CO2 emissions by 32% during a year, while in the lag period, it will increase in the short run. In the long run, a 1% increase in crop production will reduce the CO2 emission by 86%. Renewable energy shows a negative relation with CO2 emissions in the short run; a 1% increase in renewable energy will reduced the CO2 by 0.017%. Our results support the existence of the EKC hypothesis for Pakistan. In light of the findings, it is suggested that policy makers should focus more on renewable energy to decrease the level of CO2 as much as possible. Moreover, the government must provide subsidies for machines used for cropping and give special attention to subsectors such as livestock and fisheries.

The nexus between greenhouse gases, economic growth, energy and trade openness in Vietnam

This study explores the nexus between greenhouse gases (GHG) with economic growth (GDP), fossil fuel consumption (FEC), renewable energy (REC) and trade openness (TRO) in Vietnam by using the panel ARDL approach from 1980 to 2018 through the data set retrieved from the World Bank (2022). The results show that all four factors impact GHG emissions, in which GDP has the most substantial impact, followed by REC, FEC and TRO in the first-order model. While GDP, FEC and TRO have positive effects on GHG emission, REC indicates a negative effect, which means that more REC could reduce the release of GHG. However, the coefficient of this factor is only −0.311 compared to 0.622 of GDP at the same 1% significance level. The selected model seems to fit the investigated data with an adjusted R 2 of approximately 0.929. The results also demonstrate that the second and third forms of GDP to GHG emissions are unsuitable for the data. Based on the analysis results, the study also proposes some policy implications which reduce the intensity of GHG but still promote economic growth as follows: (1) reduce greenhouse gas emissions the contribution to GDP growth such as industry, construction, transport, agriculture, tourism services which green technology; (2) reduce the use of fossil energy and replace it with renewable energy sources; (3) perfecting the legal framework to encourage economic sectors and businesses to effectively use natural resources, especially re-valuing the cost of carbon emissions. • Unit root test with multiple structural breaks and autoregressive distributed lag bounds test have been used. • The relationship between GDP, TRO, REC, FEC with GHG in Vietnam during 1980-2018 were fitted with first-order model. • GDP, TRO, FEC have positive effect on GHG while REC is vice versa. • A rejection of EKC hypothesis indicated the impact of REC.

Is the EKC hypothesis valid in the five highly globalized countries of the European Union? An empirical investigation with smooth structural shifts.

This study analyzes the impact of globalization and income on ecological footprint over the period of 1970 to 2018 in the five highly globalized countries of the European Union ranked by the KOF index. To this end, the study uses a Fourier autoregressive distributed lag cointegration and Fourier Toda-Yamamoto causality methods. Studies that examine the effects of globalization on environmental degradation often neglect structural changes, which can lead to biased results. Using Fourier approximations, this study is the first to conduct an environmental assessment incorporating smooth structural changes for the five highly globalized countries of the European Union. The results show that (i) cointegration exists in Switzerland, Sweden, the Netherlands, Austria, and Denmark. (ii) The EKC hypothesis is valid for Switzerland and Denmark, while in Sweden and Austria, there is a U-shaped relationship between income and ecological footprint. (iii) The turning point at which income improves environmental quality is $68,191 for Switzerland and $46,600 for Denmark, and both countries have exceeded this per capita income level. (iv) Globalization is a factor that promotes environmental sustainability in Switzerland and the Netherlands. In order to regulate and manage environmental issues effectively, policy-makers should take advantage of economic development in Switzerland and Denmark as well as globalization in the Netherlands and Switzerland.

Do the asymmetric effects of technological innovation amidst renewable and nonrenewable energy make or mar carbon neutrality targets?

ABSTRACT The unflinching surge in global warming has left the world in ecological chaos. Consequently, governments across the globe are committing to achieving decarbonizing the environment with a target aimed at 2050, of which China is a key player. In effect, this study seeks to contribute to the strides by querying the extent to which shocks in technological innovation make or mar the sustainability of the Chinese environment from 1990 to 2019. The other impacts of foreign direct investment, renewable and nonrenewable energy, and economic growth are considered in the model estimated through nonlinear ARDL robust for ascertaining instantaneous positive and negative effects. The results reveal that technological innovation promotes and hinders environmental sustainability based on the positive and negative shocks, respectively, whereas the adverse shocks impede it. Besides, economic growth and nonrenewable energy turn out to be negative predictors of environmental sustainability while renewable energy and FDI facilitate it. The results of the Fourier Toda Yamamoto corroborate the NARDL results. The EKC hypothesis is not validated for China based on estimates from the novel Itkonen (2012) approach. Following the empirical results, practicable policy insights toward sustaining the environment in China and beyond are formulated.

Empirical analysis of the impact of China-Japan-South Korea transportation infrastructure investment on environmental degradation and the validity of the environmental Kuznets curve hypothesis.

Building sustainable and affordable transport systems is a key issue for social development and sustainable urban expansion. The study used dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS) to examine the impact of transport infrastructure investment on environmental degradation in China, Japan, and South Korea over the period 1995-2020 and the validity of the EKC hypothesis. The results show that GDP has a significant positive effect, and GDP2 and GDP3 have significant adverse effects on environmental degradation, respectively. These results confirm the validity of the inverted U shaped EKC hypothesis in selected Asian countries. Road infrastructure investment has a significant positive effect, while railway infrastructure investment has a significant adverse effect on environmental degradation. Air infrastructure investment and trade opening have a progressive and statistically significant impact on environmental pollution. Modern rail systems that run on electricity are considered less polluting, so the share of rail infrastructure investment in the transport mix can help build sustainable and safe transport systems at the city Centre and intercity levels and reduce emissions in Asian countries. Moreover, strict enforcement of the prevailing environmental conditions of trade agreements should be encouraged to reduce the increasing impact of free trade on environmental pollution.

Decoupling and scenario analysis of economy-emissions pattern in China's 30 provinces.

The tension between reducing CO2 emissions and economic growth has become increasingly prominent in recent years, while China is vigorously promoting ecological civilization to achieve sustainable development. However, the factors influencing China's current economic emission nexus at the regional and provincial levels and the sustainability of the strong decoupling state remain unclear. We analyze the decoupling of emissions at the national and provincial levels of the Chinese economy from the perspective of historical patterns and current drivers from 1997 to 2019. Also, we developed three scenarios (i.e., pessimistic, median, and optimistic scenarios) to analyze the impact of decoupling relationship changes. We find that China's national decoupling relationship has eased since 1997, but it has not yet reached the ideal state, with provinces mainly exhibiting weak decoupling. The EKC hypothesis is tested for the whole country and 30 provinces and finds that 15 provinces have two turning points, 13 provinces have one turning point, and the others have no turning point. Based on the scenario analysis, the total emissions in the pessimistic scenario (S1) without any improvement of decoupling would increase by 73.97% compared to the level of 2019. However, the total emissions in the optimistic scenario (S3), in which all provinces obtained strong decoupling, are almost half of the level of 2019. This is mainly from the reduction of emissions in the western less developed regions (e.g., Shanxi, Inner Mongolia, and Xinjiang) and developed coastal regions (e.g., Jiangsu and Shandong). On the basis of the results of factor analysis, we put forward policy recommendations for expanding electrification, optimizing industrial structure, and promoting technological innovation.

Economic growth, international trade, and environmental degradation in Sub-Saharan Africa

PurposeThis study investigates the relationship between economic growth, international trade, and environmental degradation in Sub-Saharan Africa (SSA), focusing on the validity of the environmental Kuznets hypothesis (EKC), the pollution havens hypothesis (PHH), and the factor endowment hypothesis (FEH).Design/methodology/approachThe study uses annual data for 41 SSA countries between 1990 and 2017 and employs the bias-corrected least square dummy variable (LSDVC) estimation techniques. Environmental degradation is indicated by carbon dioxide (CO2), delicate particulate matter (PM2.5) emissions, and deforestation.FindingsThe results confirm the validity of the EKC hypothesis for PM2.5 emissions and deforestation but not for CO2 emissions. The results also indicate that international trade reduces deforestation and that both the PHH and FEH are valid for CO2 emission but not for PM2.5 emissions and deforestation.Practical implicationsIn this paper, the authors are able to illustrate that both economic growth and international trade can harm the environment if unchecked. Therefore, the conclusion of this study offers policy options through which SSA countries can achieve desired economic growth goals without affecting environmental quality. The study can be a benchmark for environmental policy in the region.Originality/valueThe authors provide an in-depth discussion of the growth-trade-environmental degradation nexus in SSA. The EKC, PHH, and FEH’s validity confirm that economic growth remains a threat to the local natural environment in SSA. Hence, the need for a trade-off between economic growth needs and environmental degradation and understanding where to compromise to achieve SSA's economic development priorities.

Testing the EKC Hypothesis in terms of Trade Openness, Industrial and Construction Development: Evidences from Northern European and Latin American Countries

The main research objective is to examine the long-run relationship between trade openness, industrial & construction development, economic growth, energy consumption, and ecological footprint by performing the Westerlund co-integration, FMOLS, DOLS, and CCR tests for Northern European (Denmark, Finland, Netherlands, Norway, and Sweden) and Latin American Countries (Argentina, Brazil, Chile, Colombia, and Uruguay) from 1980 to 2018. Considering the FMOLS, DOLS, and CCR test results of Northern European countries the EKC hypothesis is not confirmed for Finland, Norway and Sweden except Denmark and Netherlands. There is a long-run relationship among industrial & construction development, economic growth, and ecological footprint for both Denmark and Netherlands which verifies the EKC hypothesis from 1980 to 2018. When the remaining countries are examined, the results are opposite. There is no long-run relationship among relevant variables for Finland, Denmark, and Sweden from 1980 to 2018. Besides, there is no effect of industrial & construction development, economic growth, energy consumption, and trade openness on ecological footprint for Finland, Denmark, and Sweden from 1980 to 2018. The EKC hypothesis is not confirmed for Latin American countries as well. Similar results are obtained by using the same variables and other models including FMOLS, DOLS, and CCR for all Latin American countries. The pollution problem in question is of particular concern to developed countries. Because, these countries are forced to use heavy industry, which is far from the nano-technological industry structure and has high environmental degradation. In this context, Denmark should build an artificial island as a precaution against the climate crisis. Another main recommendation is Dutch government should build hydrogen heated homes in order to wage a fight against air pollution.

The Nexus among Civil Aviation, Energy Performance Efficiency and GDP in terms of Ecological Footprint: Evidence from France and Finland

The major goal of this research paper is to determine the long-run linkage among variables and the impact of civil aviation, energy productivity (efficiency), economic growth (GDP), on ecological footprint through conducting the multivariate regression method, Phillips‑Ouliaris and Engle‑Granger, Jarque – Bera Normality, and Cusum tests from 1970 to 2020. According to results of multivariate regression method, civil aviation, energy efficiency, and economic growth affect the ecological footprint from 1970 to 2020 in France which is coincide with Phillips‑Ouliaris and Engle‑Granger tests. On the contrary, there is no effect of independent variables on dependent variable (ecological footprint) in Finland which is consistent with Phillips‑Ouliaris and Engle‑Granger tests. In this respect, The long-run relation of the model is verified by the cointegration test of Engle-Granger and Phillips-Ouliaris for France. However, there is no long-run co-integration among variables for Finland from 1970-2020. To sum up, empirical results of France is verified EKC hypothesis. However, EKC hypothesis is not verified for Finland.

Carbon Emissions, Ecological Efficiency, and the Economic Development Stage: Evidence from the Yellow River Basin

This paper has explored the relationship between CO2 emissions, eco-efficiency, and economic growth, which has important theoretical and practical significance for realizing high-quality development of the Yellow River Basin (YRB). Based on the data of 99 prefecture-level cities in the YRB from 2003 to 2017, this paper analyses the temporal and spatial variation and agglomeration characteristics of CO2 emissions and eco-efficiency in the YRB. The spatial Durbin model (SDM) with fixed effects is used to test the relationship between CO2 emissions, eco-efficiency, and economic growth in the YRB by using new structural economics theory and the EKC hypothesis. The results show that (1) the YRB is in a stage of extensive economic development with the coexistence of high CO2 emissions and low eco-efficiency and shows a trend of transformation and upgrading to a stage of high-quality economic development; (2) CO2 emissions and eco-efficiency are spatially heterogeneous; CO2 emissions and eco-efficiency in the upper reaches are low, and the middle maintains relatively high eco-efficiency and high CO2 emissions while the lower reaches have both high CO2 emissions and low eco-efficiency; (3) the relationship between CO2 emissions and economic growth is N-shaped, and there is an inflection point of accelerated increase (per capita GDP is 45,558 yuan). The YRB has crossed this inflection point, and CO2 emissions are accelerating with economic development at this stage. The relationship between eco-efficiency and economic growth is U-shaped, with the inflection point of per capita GDP at 46,483 yuan. The YRB has just crossed the point, and eco-efficiency will subsequently steadily rise with economic development.

Analyzing the Environmental Kuznets Curve Hypothesis in terms of Airplane Transport: Empirical Examination for Baltic States

The main goal of this paper is to investigate the long-term nexus among energy consumption, economic growth, civil aviation, and CO2 emissions by performing the ARDL, DOLS and Panel data analysis for Baltic countries including Estonia, Finland, Latvia, and Lithuania from 1992 to 2021 within the context of EKC hypothesis. The long-term ARDL and DOLS models result indicate that there is a statistically significant relationship between the air transport, CO2, GDP, and energy consumption for Estonia from 1992 to 2021. On the other hand, the impact of independent variables containing air transport, GDP, and energy consumption on CO2 emission is demonstrated empirically from 1992 to 2021 which is affirmed the EKC hypothesis for Baltic countries through panel data analysis. According to empirical findings, legal arrangements should be made for the production and use of alternative fuels by policy makers in order to provide economic and social benefits in terms of reduction environmental pollution. Low-emission fuels and hybrid or electric vehicles must be used to reduce carbon dioxide emissions as a solution for environmental degredation in Baltic countries.

Does the financialization of natural resources lead toward sustainability? An application of advance panel Granger non-causality

The financial management of natural resources endowment is necessary to accomplish sustainable economic growth agenda. The previous literature on the elements leading to environmental deterioration has resorted largely to CO2 emissions or ecological footprint following a restrictive approach. A scarce body of studies has noted globalizing environmental pollution components, such as ecological status. The objective of the study is to probe the financialization of natural resources to meet sustainable targets in the context of the top ten natural resource-rich countries spanning the period 1990–2018. Empirical findings, based on a novel panel Granger technique (Juodis et al., 2021), disclose that natural resources contribute to ecological deterioration rather than preserving the environmental performance. Financial markets and institutions, on the other hand, have been effectively serving the environment to curtail the detrimental effects of natural resources on the environmental performance by providing solutions to help regulators to meet their economic and sustainability goals simultaneously. Further, it appears that economic growth validates the EKC hypothesis and leads to alleviating the atmospheric worth in the beginning whilst it preserves the environmental quality after reaching a threshold point. The outcomes documented in this study offer some appropriate policy implications to accomplish sustainable growth objectives.

CO2 Emissions in G20 Nations through the Three-Sector Model

This paper examines the relationship between CO2 emissions in three economic sectors of G20 member countries using the environmental IPAT model and STIRPAT model and validates the EKC hypothesis by comparing the results for developing and developed countries. The results confirm that there is a significant long-run equilibrium relationship between the three sectors (primary, secondary, and tertiary) and CO2 emissions across the panel. Furthermore, the long-run elasticities suggest that the primary sector (agriculture) positively and negatively affects the CO2 emissions of developing and developed economies, respectively. This finding proves that the development of agriculture is in line with the EKC hypothesis that a more developed economy will instead improve environmental degradation. Based on the findings, for each sector, we provide policymakers with suggestions to potentially curb CO2 emissions without significantly compromising economic growth.

Achieving Carbon Neutrality Pledge through Clean Energy Transition: Linking the Role of Green Innovation and Environmental Policy in E7 Countries

Most countries, notably those that signed the Paris Climate Agreement, prioritize achieving the zero carbon or carbon neutrality aim. Unlike earlier studies, this one assesses the contribution of environmental policy, clean energy, green innovation, and renewable energy to the E7 economies’ achievement of carbon neutrality goals from 1990 to 2019. Findings emanating from the study show that the EKC hypothesis is valid in E7 countries. Implying that emissions in the E7 countries increased with the kick-off of development but declined later due to possible potent environmental regulatory policies put in place. Similarly, across all models, renewable energy (REN), green innovations (GINNO), environmental tax (ETAX), and technological innovations (TECH) were found to exert a negative and significant impact on carbon emissions in the E7 countries both in the short and long run. On the other hand, economic expansion (GDP) positively impacts environmental deterioration. Furthermore, the country-specific result shows that, on average, Brazil, India, China, Russia, Mexico, and Indonesia have significant environmental policies aiding carbon abatement. Except for Brazil, Mexico, and Indonesia, the income growth in the rest of the countries does not follow the EKC proposition. Furthermore, the causality result revealed a unidirectional causal relationship between GDP, REN, and GINNO to CO2 emission. No causality was found between ETAX with CO2, while a bi-directional causality exists between technology and CO2 emissions. Based on the finding, policymakers in the E7 countries should move away from fossil fuels because future electricity output will not be sufficient to reduce emissions considerably. Environmental regulations, encouraging technological innovation, adopting green and sustainable technology, and clean energy sources, among other things, demand radical and broad changes.

How ICT and globalization interact with the environment: a case of the Chinese economy.

An era of rapid changes in the technological and economic aspects of developing and developed countries can have detrimental extortions on the environment around the world. From the perspective of globalization, the rapid development and growth can reroute to enhance the interaction between people, organizations, and countries across the globe including China through the usage of information and communication technology which in turn contributes to the economic growth of one side, whereas on the other side, it affects the environmental quality. Referring to this aspect, this study is focused to inspect the link between information and communication technology, and globalization with the facets of degradation in the environment that as CO2 emission and ecological footprint by keeping the view of economic growth prospects as well via using the EKC hypothesis. In our study, time-series data was employed from 1987 to 2020 for China using the Dynamic ARDL approach. Grounded on the findings of the study, economic growth from the sight of GDP fallouts in rising the emission of CO2 and EFP in the short and long run whereas GDP sqr cause decrease in the CO2 emission and EFP. Thus, this authorizes the presence of inverted U-shaped existence among GDP sqr, CO2 emission, and EFP. Therefore, this provides provision for the EKC hypothesis in China. Furthermore, ICT and globalization cause a decline in the emission of CO2 and EFP in the short and long run respectively. In combatting challenges linked to the environment, globalization, as well as ICT, is seen as a crucial factor based on the pieces of evidence in our study while the policy implications are also proposed in the paper.

Effects of industrial green total factor energy efficiency on haze abatement: A spatial econometric analysis based on China's 272 cities.

Environmental issues represented by haze pollution have become the focus of all sectors of society. Industrial activities, especially industrial energy consumption play an important role in it. After the energy consumption of provincial industrial sectors is decomposed into urban industrial sectors through nighttime light data, this study measures the industrial green total factor energy efficiency (IGTFEE) of Chinese cities from 2003 to 2017, and the haze abatement effect of IGTFEE is investigated from the perspective of spatial correlation. The results show that China's haze pollution and IGTFEE present a positive spatial cluster. Additionally, China's haze pollution has obvious path dependence that shows a monotonous decreasing trend as the aggravation of haze pollution. Meanwhile, although haze pollution shows a serious leakage effect, it plays a warning role in haze control in surrounding areas. This effect is stronger in the most severely polluted areas that have higher economic levels. Not only does the improvement of IGTFEE have a positive effect on local haze abatement but can control haze pollution in spatially related areas through spillover effects and spatial feedback effects. However, the effects are significantly heterogeneous and asymmetric across quantiles, where IGTFEE has a marginal diminishing distribution on haze abatement at the middle and low quantiles, but the haze pollution has intensified at the high quantiles due to the energy rebound effect. The results also reveal that haze abatement conforms to the spatial EKC hypothesis in China. Meanwhile, industrial agglomeration, environmental regulations, and industrial upgrading are vital drivers for haze abatement.

중국의 경제성장과 무역개방도가 제조업 수출에 내재된 CO₂ 배출량에 대한 영향 분석

This study investigated the impacts of economic growth and trade openness on CO2 emissions embodied in manufacture’s exports in China. In order to analyze the nexus of growth-trade-CO2 emissions, this study constructed the economic growth and trade on CO2 emissions models, which is based on the traditional EKC hypothesis, and utilized the decoupling index, which explores the co-movements between two variables. The main findings are as follows. First, the relationship between economic growth and CO2 emissions has the inverted U shaped curve, while the relationship between trade openness has the U shaped curve. Second, some fields of manufacture have the coupled trend with respect to trade openness and CO2 emissions embodied in exports. Therefore, exporting countries are responsible for not only CO2 emissions in production process, but also CO2 emissions embodied in trade.

Air quality and health benefits of increasing carbon mitigation tech-innovation in China.

Most studies on the short-term local benefits of carbon mitigation technologies on air quality improvement and health focus on specific technologies such as biofuels or carbon sequestration technologies, while ignoring the overall role of the growing scale of low-carbon technologies. Based on STIRPAT model and EKC hypothesis, this paper takes 30 provinces in China from 2004 to 2016 as research samples. We builded the panel double fixed effect model to empirical analysis of climate change on carbon mitigation tech-innovation suppressing the influence of haze pollution, on this basis, the mediating effect model was used to explore the mediation function of industrial structure and energy structure. Meanwhile, we drawed on the existing studies on air quality and health benefits, and quantify the co-benefits of carbon mitigation tech-innovation on health through the equivalent substitution formula. It shows that a 1% increase in the number of low-carbon patent applications can reduce haze pollution by 0.066%. According to this estimate, to 2029, China's carbon mitigation tech-innovation could reduce PM2.5 concentration to 15μg/m3 preventing 5.597 million premature deaths. Moreover, carbon mitigation tech-innovation can also indirectly inhibit haze pollution by triggering more systematic economic structure changes such as energy and industrial structure. Additionally, we found that the role of gray tech-innovation (GT) related to improving the efficiency of fossil energy is stronger than that of clean technology (CT) related to the use of renewable energy. This suggests that for a large economy such as China, where coal is still the dominant source of energy consumption, the short-term local benefits of improving air quality and health through the use of gray tech-innovation to improve energy and industrial structure are still important to balance the cost of carbon mitigation.

Does green technology advancement and renewable electricity standard impact on carbon emissions in China: role of green finance.

Renewable energy growth should be accelerated in order to meet our goal of carbon neutrality and peak carbon emissions. Laws like the Renewable Electricity Standard (RES) are becoming increasingly important in producing renewable energy. Using green technology advancements is seen as balancing economic growth with environmental security. Though the connection between green technology advancements and CO2 emissions is poorly understood, empirical research is lacking, especially in developing countries. Climate change action now falls under a single overarching contract, signed in Paris on November 4, 2016. Global warming mitigation aims to keep temperature increases to no more than 2°C above preindustrial levels. By 2060, China intends to reach carbon neutrality by developing green technologies (GTI). Because of these interconnections, this research explores the relationship between green technology innovation (GI) and renewable energy investment (REI) in selected Chinese provinces from 2005 to 2019. GI, REI, urbanization, industrial value-added, and income per capita were all considered in the STIRPAT model. We used a panel of chosen regions to test two relatively new panel estimation methods empirically: "continuously updated fully modified" (Cup-FM) and "continuously updated bias-corrected" (Cup-BC). According to our findings, urbanization and green technological developments positively impact CO2 emission reduction. The panel also finds that investments in renewable energy and the industrial sector fail to reduce pollution levels. A positive and negative coefficient of income per capita indicates that the inverted U-shaped EKC hypothesis is valid for the Chinese provinces. The results provide vital strategy insights and recommendations for the panel of experts and countries worldwide.

N-shaped EKC in sub-Saharan Africa: the three-dimensional effects of governance indices and renewable energy consumption.

The environment has been delivering ecological balance through mitigation and ultraviolet ray protection. Nevertheless, human interactions have been creating unfavorable changes on environmental quality. Accordingly, based on a panel data (1996-2018), this study inspected evidence for N-shaped EKC across 41 SSA countries classified under three income categories. By extending the EKC hypothesis and using the three-stage simultaneous equation modeling, the study also estimated the direct and indirect effects of the three governance indices on environmental quality in the region. Consequently, the study confirmed N-shaped EKC only in the upper middle-income SSA countries. Furthermore, in the lower-income SSA countries, while the institutional governance index has a direct negative effect on environmental degradation, government effectiveness has an indirect negative effect on GHG emissions through renewable energy consumption. In the lower-middle-income SSA countries, while economic governance has a direct positive effect, political and institutional governances have a direct negative effect on environmental degradation. Here, also, political stability and the absence of violence have an indirect negative effect on GHG emission through income. In the upper middle-income SSA countries, control of corruption and the regulatory quality of the government has an indirect negative effect on environmental quality through income and renewable energy consumption, respectively. The inconclusive effects of the three governance indices on environmental quality might be the result of income heterogeneity across the region. Thus, policy prescriptions based on understanding the heterogeneous effects of governance indices within the three income groups might help to prove environmental quality in the region.