Environmental Kuznets Curve 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.

Investigating the role of biomass energy consumption and forest products trade on the forest footprint in Finland: an environmental Kuznets curve analysis

AbstractForests are essential in mitigating climate change by absorbing carbon dioxide and maintaining ecosystems, mainly through preserving biodiversity. For this reason, the sustainability of forests is essential for human life. This paper examines the role of biomass energy consumption, forest product trade, and economic growth on Finland’s forest footprint from 1970 to 2018. By employing Fourier-based unit root and cointegration tests, we confirm the Environmental Kuznets Curve (EKC) hypothesis, demonstrating a long-term relationship in which economic growth first raises, then reduces the forest footprint. Biomass energy consumption and forest products trade show an insignificant long-term effect on the forest footprint. We found unidirectional causality from the forest footprint to biomass energy consumption and economic growth. This research fills a gap by focusing on the under-researched forest footprint within the EKC framework, particularly in Finland’s context of stringent forestry policies. Our findings emphasize the need for interdisciplinary collaboration to enhance environmental policy and sustainability practices. We further contribute to the broader literature on sustainable forest management and offer actionable policy recommendations for enhancing Finland’s environmental strategies.

Examining the Evolution Trajectory of Construction and Demolition Waste in China: An Empirical Analysis Based on Spatial Metrology and the Environmental Kuznets Curve

Curbing the increasing construction and demolition waste (C&DW) is critical for achieving China's goals of cleaner production and environmental sustainability. This paper based on the Environmental Kuznets Curve (EKC) and combining spatial econometrics with the GM (1,1) model, predicts key time points that will change the growth trend of C&DW and explores measures to reduce production. The results indicate that: (1)As of 2022, more than 87% of China's regional C&DW is unevenly distributed and agglomeration exists. More than 50% of the regions exhibit "high-high" agglomeration, which can lead to an inevitable inter-regional transfer of C&DW, but the central region has formed a "segregation zone". (2) The evolution trajectory of C&DW shows a "growth-decline-regrowth" pattern, with points of change for regrowth occurring when GDP per capita reaches 142,914.24. Construction enterprises and consumption levels contribute significantly to C&DW, while the opposite is true for education, market competition, and transportation. (3) More than 95% of regions will experience C&DW regrowth during 2036-2040. Economic development is no longer considered to play a leading role in C&DW reduction measures. Even if the economic growth rate is increased by 10%, 30%, or even 50%, C&DW will enter the era of full-scale regrowth only three years earlier on average. This paper aims to shift the current focus of C&DW forecasting from solely on model innovation to accurately calculating the timing of future C&DW regrowth by verifying the EKC hypothesis application. This approach fills the gap in the quantitative analysis of long-term C&DW forecasting and provides new empirical cases for the theory of environmental economics. Furthermore, it addresses potential obstacles for decision-makers in achieving "zero waste cities", thereby promoting global cleaner production and environmental sustainability.

The Environmental Kuznets Curve (EKC) Hypothesis on GHG emissions: analyses for transportation industry of South Africa

A series of energy-econometrics techniques were employed for a 5-year time span between 2016 and 2020. The tests of Environmental Kuznets Curve (EKC) hypothesis were conducted essentially to examine the significance of economic growth (GDP), energy consumption (EC), with energy intensity (EI), and on-road passenger vehicles (PV) as related to economic development on the mitigation of carbon emissions (CO2-eq) in the transportation industry of South Africa. The findings from the prevailing research imply that, with respect to South Africa’s transportation industry, CO2-eq emissions increased in the course of early phases of economic growth while it tends to decline at certain levels of economic threshold. Though the nation maintains the edge of turning points in both the industrial and circular economy. The results further indicate a nexus between GDP and EC, which consequently affect the CO2-eq emissions. The findings proffer the needs to monitor the EC from the long-run impacts alongside the short run impacts of the forecast. The per capita GDP from the short-run impacts of t-stat—(4.928) to the long run effects of t-stat—(5.033) rises, indicating its improper influence in the industry. To limit the use of fossil-based fuels, as demonstrated in the negative signal of EI for long-run impacts of a p-value (0.2835), then to the short run effects which possess a significant p-value. It also highlights the directional correlation surfacing between EC, EI and South Africa’s on-road PV. In the computation context, the series was determined to be stationary at its first differences, as evident by the R2 combined with the R2 (Adjusted) values of 0.9837 and 0.9827, respectively, for both long-run and short-run assessments. The indication of the research among others further reveals that public transportation systems of road and rail options, which have the potentials to incorporate alternative energy sources, can be the required efforts to mitigate climate change and global warming effects in the transportation industry.

The Impact of Economic Factors on Changing Carbon Emission Landscape in ASEAN With ARDL Approach

This study aims to analyze the factors influencing carbon emissions in the member countries of the Association of Southeast Asian Nations (ASEAN). The data used in this study covers the period from 1990 to 2021, utilizing the Autoregressive Distributed Lag (ARDL) analysis method. All independent variables show a significant impact on carbon emissions in both the short and long term. This research provides evidence that factors such as urbanization, foreign direct investment, population, and economic growth significantly contribute to the increase in carbon emissions in ASEAN countries. The findings also validate the Environmental Kuznets Curve hypothesis for carbon emissions in ASEAN countries. In other words, economic growth leads to a reduction in carbon emissions. The ASEAN region has experienced substantial economic growth over the past few decades. However, carbon dioxide (CO2) remains a socio-economic issue in the ASEAN region. The results of this study can be highly beneficial for policymakers in the region regarding sustainability and economic development.

Economic growth and sustainable development: evidence from OIC countries

Purpose This paper aims to examine the dynamic relationship between economic growth and sustainable development, integrating the Environmental Kuznets Curve (EKC) in 22 Organization of Islamic Cooperation (OIC) member countries across income groups. Design/methodology/approach Using annual data between 1990 and 2022, the authors apply the cross-correlation coefficient (CCC) approach of Narayan et al. (Economic Modeling, 2016, 53, 388–397) to examine the lead/lag relationship between GDP per capita and sustainable development. This study further validates the findings through a panel Granger causality test and a fixed panel regression model. Findings This research provides evidence of a U-shaped EKC for only 1 out of 22 (5%) OIC countries. For 13 out of the 22 (59%) OIC countries, increasing income growth is expected to enhance sustainable development in the future. The results show that as income levels rise, there will be a more significant decline in sustainable development for high-income OIC countries in the future than for both middle-income groups, contradicting the EKC hypothesis. The findings from the panel Granger causality and panel regression models also support the CCC results. Originality/value This study proposes a reverse version of the EKC hypothesis and contributes to the literature on economic growth and environmental sustainability. With increasing economic growth, the results can assist OIC member governments and policy-makers in designing tailored policies and practical measures for future sustainable development.

Testing the environmental Kuznets Curve hypothesis at the sector level: Evidence from PNARDL for OECD countries

Testing the environmental Kuznets Curve hypothesis at the sector level: Evidence from PNARDL for OECD countries

Illuminating the path to decarbonization: Nuclear energy consumption, clean energy production, and sustainable fuel production for long-term development

The global concern over carbon emissions has necessitated a deep understanding of energy use and air pollution. The fossil fuel- and nuclear-dependent Russian economy is an exciting exception. It examined how nuclear energy consumption (NEC), electricity generation, R&D investment, clean energy production technology, e-commerce penetration, capital creation, and carbon pollution affect the Russian economy. Short- and long-term interactions between these variables are assessed using the ARDL-Bound testing model for 1995Q1–2020Q4. The results show that NEC negatively correlates with CO2 emissions. The study also supports the inverted U-shaped Environmental Kuznets Curve (EKC) hypothesis, showing a positive and significant relationship between clean power production technology and CO2 emissions and a negative and significant relationship between square clean alternative energy innovation and CO2 emissions. Scientific and technical expenditures, fossil fuel coal liquefaction, and investment all negatively and statistically significantly affect CO2 emissions. However, the analysis implies that e-commerce increases CO2 emissions. These findings highlight the need for significant R&D investment to create precise and realistic ways to decrease carbon emissions and protect the environment in accordance with COP 26 targets. These findings have significant implications for the Russian economy, showing that improving energy sources and investing more in R&D may reduce carbon emissions.

Identification of Factors Affecting Net Zero Emission Level in Indonesia

Amid the rising risks of fossil fuel prices and uncertainties about the global energy supply, countries worldwide have the opportunity to strengthen the development of clean energy investments. This study analyzes the impact of economic growth and other variables, such as fossil fuel consumption, renewable electricity generation, and low-carbon energy use, on carbon dioxide emissions in Indonesia over the past 58 years, from 1965 to 2022. The analysis compares the findings with the Environmental Kuznets Curve (EKC) hypothesis using quadratic equations and cubic equations through the stepwise application of ordinary least square (OLS) methods. Projections suggest that this relationship could follow the Environmental Kuznets Curve (EKC) hypothesis with an inverted U-shape as GDP per capita increases, CO2 emissions per capita rise until reaching a turning point at $12,440 GDP per capita, after which CO2 emissions per capita potentially decrease with further GDP growth. The EKC is a theoretical framework that suggests that environmental degradation initially increases with economic growth, but it starts to decrease beyond a certain point. The analysis also shows that projections could follow an N-curve when variables such as fossil fuel consumption and low-carbon energy influence the NZE level. This indicates that Indonesia still needs to consider energy security in the short and medium term while advancing sustainable energy initiatives. There is also a need for support in research and development of environmentally friendly technologies to reduce emissions alongside national economic growth.

Testing the Environmental Kuznets Curve Hypothesis within the Context of Industrial Development through NARDL Model: The Case of France

Energy is one of the necessary and vital factors for the economic development of countries and the increase in living standards. The limited availability of conventional energy resources, in parallel with the rapid increase in energy consumption due to industrialization activities and technological developments, has encouraged countries to change their energy production policies and use alternative energy sources. For this purpose, in the study, the relationship and direction of the relationship between industrial production, CO2 emissions, energy use and economic growth in France are examined with the carrying out of the ADF, PP, KPSS unit root and the NARDL test for the period 1990–2023. The analysis findings reveal that the variables are cointegrated in the long-run and a 1% unit raise in energy consumption would trigger CO2 emissions by 0.46%. The increase in energy consumption in the long term affects both negatively and positively in the long term. While a 1% increase in energy consumption reduces carbon emissions by 0.48%, a 1% decrease causes a 0.35 decrease in carbon emissions. The positive increase in economic growth and the negative increase in energy consumption trigger environmental pollution by causing an increase in carbon dioxide emissions. There is interdependence between economic activities and environmental pollution. Policy makers need to adopt a strategic approach in solving the rapid industrialization phenomenon and the accompanying magnitude of energy consumption, the pressure on natural resources and the environmental pollution problems resulting from them. In this respect, it is an inevitable necessity for countries to continue multilateral negotiations in which the public sector, business world, academia and non-governmental organizations will take part in solving environmental problems.

Spatial effects of renewable and fossil energy consumption on the ecological footprint for the EU Countries.

This study examines the spillover of pollution among the 26 European Union (EU) countries from 1995 to 2020. In order to quantify pollution spillovers among the countries, we estimated the Environmental Kuznets Curve (EKC) using spatial econometric methods. Our research is unique in that it investigates ecological footprint spillovers for EU countries. This study also considers the direct and indirect effects of renewable and fossil energy consumption and globalization on environmental degradation in EU countries. The empirical results favor the validity of the EKC hypothesis. Our results support the presence of positive and significant ecological footprint spillovers among EU countries. Our spatial estimates also reveal the significant spillover impact of explanatory variables on the ecological footprint. The ecological footprint of the local country is declining owing to the consumption of renewable energy in neighboring countries. Furthermore, the fossil energy consumption of the local and neighboring countries has a positive impact on the ecological footprint. Evidence obtained from our spatial estimates provides useful insights to policymakers in developing appropriate environmental policies to combat climate change.

World economies’ progress in decoupling from CO2 emissions

The relationship between economic growth and CO2 emissions has been analyzed testing the environmental Kuznets curve hypothesis, but traditional econometric methods may be flawed. An alternative method is proposed using segmented-sample regressions and implemented in 164 countries (98.34% of world population) over different periods from 1822 to 2018. Results suggest that while the association between GDP per capita and CO2 emissions per capita is weakening over time, it remains positive globally, with only some high-income countries showing a reversed association in recent years. While 49 countries have decoupled emissions from economic growth, 115 have not. Most African, American, and Asian countries have not decoupled, whereas most European and Oceanians have. These findings highlight the urgency for effective climate policies because decoupling remains unachieved on a global scale, and we are moving away from, rather than approaching, the Paris Agreement goal of limiting temperature increase to 1.5 °C above preindustrial levels.

Uncovering the drivers of CO2 emissions in the United States: The hidden spillover effects

This study explores the applicability of the Environmental Kuznets Curve (EKC) hypothesis in the United States (US) from 2006 to 2020, employing the Spatial Durbin Model (SDM) to analyze the cross-border effects of pollution among states. The results indicate that although economic growth initially decreases environmental degradation, it subsequently contributes to more significant environmental degradation, challenging the EKC hypothesis's validity at the US state level. Factors such as higher energy prices and reliance on fossil fuels are also identified as significant drivers of environmental deterioration, with varying impacts observed across states. Conversely, adopting renewable energy sources is crucial in mitigating pollution levels. The study underscores the importance of coordinated state-level efforts to harmonize economic growth with sustainable environmental practices. It highlights the complexities of policymaking in balancing economic development with environmental conservation and emphasizes the need for targeted interventions to address environmental challenges effectively. This research enhances our understanding of sustainable development pathways amidst diverse regional dynamics within the US by providing empirical evidence and policy insights.

Endogenous Growth and Environmental Kuznets Curve: Lessons from FDI Impact on Economic Growth in Sub-Saharan Africa

Purpose: This study aims to determine the influence of Foreign Direct Investments (FDI) on economic growth in Sub-Saharan Africa (SSA). It examines the endogenous growth theory and the Environmental Kuznets Curve (EKC) theory, and how they relate to the regional data.Method: Using panel quantile autoregression models, this study explores the relationship between FDI inflows into SSA with energy consumption, carbon emissions, and economic growth. The study is based on data from 1975 to 2018.Result: The study findings conclusively demonstrate that foreign direct investment has a significant impact on the economic growth of the SSA region. Furthermore, the study reveals that energy consumption and carbon emissions in the SSA have consistently increased throughout the study period, with foreign direct investment being identified as the primary driver of this trend. These findings are consistent with the Environmental Kuznets Curve (EKC) hypothesis, as well as the endogenous growth theory, which suggests that FDI operations can have negative consequences on the host environment.Practical Implications for Economic Growth and Development: The study suggests that Sub-Saharan Africa should manage FDI carefully to balance economic growth with environmental sustainability by promoting green investments and creating an investment-friendly environment.

Financial inclusion and environmental pollution in sub-Saharan Africa: moderating effects of economic growth and renewable energy

A thriving literature exists about the role of financial inclusion in socio-economic development. Nevertheless, the environmental effects of financial inclusion are largely unknown in the literature, especially in sub-Saharan African countries. Therefore, this study explores the association between financial inclusion and CO2 emissions utilizing data from 23 sub-Saharan Africa for the period 2004–2019. Based on different estimation methods such as dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS), canonical correlation regression (CCR), and an instrumental variable generalized-method of moment (IV-GMM), the results show that financial inclusion is responsible for a substantial increase in CO2 emissions. In addition, financial inclusion moderates economic growth, resulting in higher CO2 emissions. Alternatively, financial inclusion moderates renewable energy use to lower CO2 emissions. The outcomes also verify the presence of the Environmental Kuznets Curve hypothesis (EKC). This study proposes uniting financial inclusion and environmental policies as a strategy for reducing CO2 emissions in sub-Saharan Africa.

Emergence of Forest Environmental Kuznets Curve in Africa: Some New Evidences

ABSTRACT: The African continent, renowned for its diverse landscapes and abundant biodiversity, grapples with a critical environmental challenge – deforestation. The swift depletion of forests, serving as the primary habitat for 80% of the world’s terrestrial animals and plants, poses a severe threat in Africa. Human activities, including logging, agricultural expansion, and urbanization, have jeopardized numerous ecosystems, exacerbating the overarching global climate crisis. Beyond serving as mere collections of trees, forests are intricate ecosystems supporting a staggering diversity of flora and fauna. The repercussions of forest loss in Africa are profound, resulting in a significant decline in biodiversity. Numerous species, some exclusive to these ecosystems and found nowhere else on the planet, now teeter on the brink of extinction. The predicament of deforestation in Africa is intimately intertwined with the broader global challenge of climate change. Urgency is paramount in addressing this crisis, as the loss of forests impacts not only local ecosystems but also exacerbates the overarching climate emergency. Reforestation emerges as a pivotal solution, offering an opportunity to reverse the damage inflicted on these vital ecosystems. This study examines whether forest natural resources can explain the environmental Kuznets curve hypothesis in African countries. The empirical strategy is based on the second-generation cointegration approach, cross-sectional dependency autoregressive distributed lag (CS-ARDL) and Augmented Mean Group (AMG) estimator. The findings show a potential long-run relationship between the forest rent and the environment. Further analysis highlights the importance of effective management of natural forest resources for improving environmental quality in Africa. We recommend that policymakers prioritize the restoration of ecosystems that have suffered carbon depletion due to human activities. Restoration efforts should strategically aim to enhance carbon sequestration capacity and rebuild biodiversity. Additionally, the establishment of robust monitoring and reporting systems is imperative to track current carbon emissions from forests. This entails regular assessments of forest carbon stocks, land-use changes, and the effectiveness of ongoing conservation and restoration initiatives.

문화예술부문에 대한 재정지출이 온실가스배출에 미치는 영향분석

As the culture and arts sector develops alongside economic growth, the increase in greenhouse gas emissions highlights the importance of environmental considerations in the context of climate change. This study employs a two-step estimation method using a dynamic panel model to analyze the impact of fiscal expenditure for the culture and arts sector on greenhouse gas emissions, distinguishing between direct and indirect effects. The first-stage analysis reveals that increased fiscal expenditure in the culture and arts sector positively impacts regional economic growth. The second-stage analysis indicates the presence of an inverted U-shaped curve between per-capita GRDP and greenhouse gas emissions, supporting the Environmental Kuznets Curve hypothesis. While fiscal expenditure for the culture and arts sector directly increases greenhouse gas emissions, it indirectly reduces them through regional economic growth. However, the direct effect is greater and more significant than the indirect effect, resulting in a net increase in greenhouse gas emissions. These findings suggest that for effective greenhouse gas reduction policies at the local government level, it is necessary to improve energy efficiency in cultural and artistic activities and promote the use of eco-friendly energy sources. Additionally, there is a need for support that can raise environmental awareness among cultural and artistic professionals and induce changes in their energy consumption patterns.

Fossil Fuel CO2 Emissions and Economic Growth in the Visegrád Region: A Study Based on the Environmental Kuznets Curve Hypothesis

The relationship between fossil fuel CO2 emissions and economic growth in the Visegrád (V4) countries (Czechia, Hungary, Poland, and Slovakia) is examined through the lens of the environmental Kuznets curve (EKC) hypothesis. Employing the modified environmental Kuznets curve (MEKC) hypothesis, time-series data from 2010 to 2022 were analyzed. The methodology encompasses a range of econometric techniques, including temporal, comparative, correlational, and regression analyses, to unravel the intricate relationship between economic development (measured by GDP per capita) and environmental pollution (CO2 emissions). Results reveal a complex nonlinear correlation between GDP per capita and CO2 emissions in the V4 countries, following an inverted U-shaped pattern. Specifically, Czechia and Hungary exhibited peak emissions at approximately USD 5000 and USD 4500 GDP per capita, respectively, with corresponding emission levels of 1.15 and 0.64 metric tons. In contrast, Slovakia’s emissions decreased after its GDP per capita exceeded USD 5000 and carbon dioxide emissions reached 0.15 metric tons. However, Poland’s data deviate from the MEKC pattern, exhibiting a consistent rise in CO2 emissions across all levels of GDP per capita. The study highlights that the power industry is the largest source of CO2 emissions in all four countries, contributing 88.09% of total emissions. The transportation and industrial combustion sectors account for about 2.12% and 1.28% of annual emissions, respectively. GDP–CO2 emission correlations vary across the V4 countries. While Czechia exhibits a positive correlation of 0.35, Hungary (−0.37), Poland (−0.21), and Slovakia (−0.11) display negative relationships. Notably, Poland experiences the most significant increase in CO2 emissions from both road transport and air traffic. The conclusions drawn from this study provide a robust foundation for developing tailored environmental policies that support sustainable growth in the Visegrád region and other transitioning economies.

The environmental repercussions of financial development and green energy in BRICS economies: From the perspective of new composite indices

This study is significant because it fills the gap in future literature by looking at the panel of 5 Brazil, Russia, India, China, and South Africa (BRICS) economies regarding the important role of financial development (FD) in environmental deterioration under the holistic measures of FD and environmental quality, something that has been largely overlooked in preceding studies. Consequently, this study explores the environmental effects of FD, employing a composite environmental quality proxy (CEQP) and a composite FD proxy (CFDP). In pursuit of this objective, the continuously updated fully modified (Cup-FM) and continuously updated bias corrected (Cup-BC) procedures are applied. These procedures enabled us to comprehensively explore the dynamic interactions between the combined index for FD and CEQP controlling agricultural activities, economic growth, renewable energy consumption, and nonrenewable energy consumption (NREC) in the panel of 5-BRICS economies from 2005 to 2019. The empirical results show that CFDP appeases environmental deterioration and thus improves environmental quality. The agricultural activities intensify environmental deterioration. The analysis also reveals a U-shaped relationship between the CEQP and economic growth (inverted U-type environmental Kuznets curve hypothesis) for the BRICS nations. Additionally, renewable energy improves environmental quality, whereas NREC decreases it. As supported by the results of the study, BRICS policymakers should encourage the financial sector to support green energy initiatives and achieve environmental stability.

Navigating the role of transport and energy taxes on carbon neutrality in Poland: A Fourier-based approach

As part of the Green Deal, European countries have set themselves the target of halving carbon emissions by 2050. Environmental taxes are a powerful tool of environmental regulations to minimize carbon emissions, and they can play a significant role in ecological development. Poland is one of the countries that generates the most environmental tax revenues among European countries. In this context, the study analyzes the impact of energy and transport taxes on carbon emissions for Poland within the framework of the environmental Kuznets curve (EKC). Accordingly, the study applies the Fourier autoregressive distributed lag approach to the data for the period 1995/Q1–2022/Q4. The results demonstrate that (i) the EKC hypothesis is valid for Poland, (ii) energy taxes support carbon neutrality targets, and (iii) transport taxes have no impact on carbon emissions. Compatible with the results, the study suggests that the Polish government should prioritize energy taxes over transport taxes and expand them to minimize carbon emissions.