Environmental Kuznets Curve Hypothesis Research Articles

Combining the role of urbanization and renewable energy in sustainable development: testing the EKC hypothesis for Africa.

The pressing necessity to curb greenhouse gas emissions due to climate change has sparked significant scientific interest in comprehending the factors behind CO2 emissions, particularly concerning environmental sustainability challenges. Nonetheless, there exists a notable gap in our understanding of how the process of urbanization interacts with the utilization of renewable energy to impact CO2 emissions. This research endeavor seeks to evaluate the complex interplay among urbanization, renewable energy, and CO2 emissions across 46 African nations spanning from 1990 to 2019. To accomplish this objective, a variety of econometric methodologies are employed, including Driscoll-Kraay standard errors, IV-GMM, and method of moments quantile regression (MMQR) panel estimations to address issues like cross-sectional dependencies, endogeneity, heterogeneity, and panel Granger causality examination. The empirical results suggest that urbanization leads to an increase in CO2 emissions, whereas the consumption of renewable energy plays a role in enhancing environmental quality by reducing CO2 emissions. A significant outcome of the study is the revelation that a combination of urbanization and renewable energy leads to a decrease in carbon emissions. Moreover, the Environmental Kuznets Curve (EKC) hypothesis is validated. Lastly, through the Dumitrescu-Hurlin panel causality test, it is uncovered that urbanization and renewable energy consumption exhibit a bidirectional relationship with CO2 emissions. To reduce dependence on fossil fuels and curb CO2 emissions, policymakers should promote renewable energy usage in urban areas.

Does emerging country's urbanization redefine the environmental Kuznets hypothesis for carbon emissions? A novel perspective on national and subnational differences

Emerging countries are experiencing rapid urbanization. Examining the link between economic growth and carbon emissions in developing nations as well as the effects of urbanization on this relationship at the national and subnational levels are the goals of this research. Thus, to investigate if China's economic development and carbon emissions align with the environmental Kuznets curve (EKC) hypothesis, this study adopts the FMOLS model and the fixed effects model. Furthermore, this study uses urbanization as a threshold variable and examines how the influence of economic development on carbon emissions would alter as a result of urbanization. The findings demonstrate an inverted U-shaped link between China's economic development and carbon emissions and the relationship is compatible with the EKC hypothesis. Although there is variability at the subnational level, most of the regions follow the inverted U-shaped connection. The carbon emissions inflection point in the western area is larger than the inflection points in the eastern and central regions. According to the threshold model, as urbanization rises, the increase in carbon emissions brought on by economic expansion declines. The eight economic areas of China differ in how the link between economic growth and carbon emissions change in the process of urbanization. But compared to the initial stage of urbanization, the last stage of urbanization in most countries lessens the impact of economic expansion on carbon emissions. To decrease carbon emissions, we must not only encourage the development of cleaner technologies and boost energy consumption efficiency, but also create carbon-reduction strategies that are specific to the growth characteristics of various areas.

Economic complexity, renewable energy and ecological footprint: The role of the housing market in the USA

Prior studies tested the environmental Kuznets curve hypothesis via the income channel, but few studies have used the housing market to examine this relationship; these papers are constrained due to the fact that CO2 emission was used as a measure of environmental deterioration, which only accounts for air pollution. Therefore, this study aims to bridge this gap by employing the housing market to test for the validity of the environmental Kuznets curve using ecological footprint in the case of the USA, which serves as a more comprehensive measure of ecological equality. The present work is the first study to explore the impact of the housing market on ecological footprint in the context of the USA. The study uses the novel bootstraps ARDL approach to assess the effects of the housing market, renewable energy, economic growth, and economic complexity on the ecological footprint in the case of the USA from 1980 to 2018. The outcomes revealed that the impacts of renewable energy and economic complexity on ecological footprint are positive and statistically significant. In addition, the environmental Kuznets curve theory has also been validated in the case of the USA. The empirical results also indicate that the housing market adversely influences ecological quality. Based on the study findings, this study offers several policy implications for the USA policymakers to promote ecological sustainability by formulating comprehensive economic and green energy policies. Furthermore, the study suggests that USA policymakers should promote a high level of complexity through knowledge and skills to achieve a sustainable ecosystem.

Assessment of the influence of institutions and globalization on environmental pollution for open and closed economies

AbstractAs the environmental sustainability effectiveness of various political systems is taken into consideration, it is doubtful as to whether the presumption of the overall efficiency of democracy can be sustained in global governance architecture. The effectiveness of autocracies and democracies (i.e., governance indicators are compared in the present study) with reference to strengths and weaknesses in environmental objectives. This analysis explores the effect of autocracy, democracy, as well as the trend of globalization on CO2 emissions for open and closed economies from 1990 to 2020. Crucial indicators such as economic growth, renewable energy and non-renewable energy are controlled for while examining the roles of economic expansion on the disaggregated energy consumption portfolios for both open and closed economies. The empirical analysis revealed some insightful results. First, for the open economies, with the exception of non-renewable energy which shows a positive significant impact on emissions, all variables show a negative effect on emissions. Furthermore, the closed economies result indicate that, apart from renewable energy which has a negative relationship with emissions, all the variables including the interaction terms have a positive relation with emissions. However, an inverted U-shaped environmental Kuznets curve hypothesis was validated for both economies.

Production- and consumption-based emissions in carbon exporters and importers: A large panel data analysis for the EKC hypothesis

The Environmental Kuznets Curve (EKC) hypothesis has become a widely used framework for the investigation of the income-environment nexus. However, the literature in this field is biased toward the reliance on production-based carbon dioxide (CO2) emissions (PBE) as a proxy for environmental degradation. This production perspective ignores the carbon emissions embedded in trade, which are estimated to make up approximately a quarter of total global emissions. Therefore, the carbon leakage issue makes consumption-based CO2 emissions (CBE) accounting vital for better understanding the relationship between income and carbon emissions. In this study, we comparatively investigate the EKC pattern based on both PBE and CBE for a sample of 85 countries over the period between 1990 and 2020. In doing so, we investigate whether different emission accounting methods have an impact on the EKC pattern and examine how this impact differs depending on whether the countries are net importers or exporters of emissions embedded in trade. To this end, we first endogenously classify countries based on the club convergence approach proposed by Phillips & Sul [1] and obtain country groups such as those that are net exporters or importers of CO2 emissions. Using the system generalized method of moments (SGMM) estimator, we test the validity of the EKC hypothesis in the second step and identify the main driving forces behind the changes in PBE and CBE for each convergent club by controlling the effect of trade and urbanization. Therefore, for the first time, we compare the EKC hypothesis based on both PBE and CBE for a large sample of countries that are endogenously divided into different groups, and investigate the potential impact of alternative emission accounting approaches and the status of being net exporters or importers of CO2 emissions on the EKC pattern. The findings support the different patterns for PBE and CBE: while the EKC hypothesis is supported for both PBE and CBE for countries that are net importers of emissions, neither PBE nor CBE show an inverted U-shaped relationship with income for countries that are net exporters of emissions. These results strongly support the need for coordination in policies to reduce CO2 emissions between importers and exporters of hydrocarbons and energy-intensive goods.

Are Natural Resource Rents and Renewable Energy Consumption Solutions for Environmental Degradation? Fresh Insights from a Modified Ecological Footprint Model

A comprehensive approach addressing the key factors exacerbating pressure on the environment is required to minimize the damages caused by global warming and environmental destruction. For this purpose, the present study investigates the effects of renewable energy consumption (REC) and natural resource rents (NRRs) on environmental degradation within the scope of the environmental Kuznets curve (EKC) hypothesis for ASEAN-5 countries. Differing from most previous studies, this research represents environmental degradation by using the ecological footprint pressure index, which considers both the supply and demand aspects of the environment. The present study covers the period between 1990 and 2018. This study employs the Method of Moments Quantile Regression (MMQR), an advanced panel technique that yields reliable results on the outlier issue, endogeneity, and non-normal distribution. The MMQR results confirm the EKC hypothesis, assuming the presence of an inverted U-shaped relationship between economic growth and environmental degradation. Moreover, the results reveal that REC and NRRs reduce environmental degradation in all quantiles. Given these results, policymakers in the ASEAN-5 countries are recommended to utilize productivity gains from natural resource rents for investment in clean energy and to shift their energy consumption policies towards renewable energy technologies and research.

Income inequality and carbon emissions in Asia: Does financial inclusion matter?

AbstractThe upsurge in the amount of carbon emissions in Asia has been potentially due to the increasing income disparities in the region. Meanwhile, with the increasing level of digital financial services, the digital approach to financial inclusion could complement the traditional approach. Therefore, we investigate the impact of income inequality on carbon emissions across 17 Asian countries for the period 2011 to 2022. We also investigate the effects of traditional and digital financial inclusions on the relationship between income inequality and CO2 emissions. This study employs the panel fixed‐effect estimator, Quantile regressions, and 2SLS to estimate the model specifications of the study. Findings reveal that income inequality has a positive and significant impact on CO2 emissions in both linear and non‐linear models. Findings also show that both traditional and digital financial inclusion significantly moderate the relationship between income inequality and CO2 emissions, with digital financial inclusion having a lesser impact. The study further finds that economic freedom is the transmission channel through which income inequality impacts CO2 emissions, suggesting that higher income disparities lower economic freedom, which further contributes to the amounts of CO2 emissions. Our findings theoretically support the marginal propensity to emit theory and the environmental Kuznets curve hypothesis. Our findings are robust to alternative measures of income inequality, CO2 emissions, and endogeneity concerns.

Institutions' quality and environmental pollution in Africa

Abstract This paper tests the pollution emissions and institutional quality nexus in Africa. Specifically, we analyze the effect of the political regime and the quality of political governance on CO2 emissions. To control for endogeneity, we apply the system generalized method of moments on a dynamic panel of African countries over the period 1996–2020. The key finding suggests that better institutions have a negative and significant effect on pollution in Africa. The findings also validate the environmental Kuznets curve hypothesis. Moreover, the results support the pollution haven hypothesis. Finally, if digitalization significantly curbs pollution, then industrialization, natural resources, as well as the intensive use of energy, are considered as positive predictors. All the sensitivity and robustness tests globally validate the strength of the negative association between the good quality of institutions and the level of polluting emissions in Africa. The results call for some policy recommendations in environmental regulation for African economies.

Contrary to expectation: The surface urban heat island intensity is increasing in population shrinking region while decreasing in population growing region-A comparative analysis from China.

Exploring the complex relationship between population change and surface urban heat island (SUHI) effect has important practical significance for the ecological transformation development of shrinking cities in the context of the prevalence of urban shrinkage and the global climate change. This paper compares the population change and SUHI effect between population shrinking region (Northeast Region, NR) and population growing region (Yangtze River Delta, YRD) in China, and explores their differences in driving mechanisms, using GIS spatial analysis and Geodetector model. Our results indicated that there are significant differences in population changes and SUHI intensity between these two regions. About 72.22% of the cities in the NR were shrinking, while their SUHI intensities increased by an average of 1.69°C. On the contrary, the urban population in the YRD shows a linear growth trend, while their SUHI intensities decreased by 0.11°C on average. The results of bivariate Moran's I index also indicated that the spatial correlation between the urban population changes and the SUHI intensity changes are not significant in the above regions. Furthermore, there are significant differences in the primary drivers of SUHI variations between these two regions. In the NR, underlying surface changes, including the changes of green coverage and built-up areas, are the most important driving factors. However, atmospheric environment changes, such as carbon dioxide emission and sulfur dioxide emission, are the key drivers in the YRD. Northam's theory of three-stage urbanization and environmental Kuznets curve hypothesis are powerful to explain these differences.

Does the Linkage between GDP, Renewable Energy, and Methane Validate the EKC hypothesis? Evidence from Indonesia

Is it feasible for Indonesia to sustain economic growth while simultaneously reducing methane emissions? This paper aims to unravel the Environmental Kuznets Curve (EKC) hypothesis for methane by integrating the role of renewable energy by employing annual data for the period 1990-2020. Autoregressive distributed lag (ARDL)-bounds testing is applied to estimate the dynamic and cointegration relationships. Also, this paper performs both traditional and breakpoint unit root tests. The EKC hypothesis is confirmed since there is an inverse U-curve nexus between GDP and methane per capita. The income turning point is 14,516 USD per capita. Indonesia’s income level is still below its estimated EKC threshold, implying that economic growth forces methane emissions to scale up. A 1% increase in GDP per capita leads to a 4.59% increase in methane per capita. However, renewable energy has a beneficial role in tackling methane emissions. A 1% increase in the share of renewable energy use leads to a 0.36% decrease in methane per capita. It is therefore recommended that to mitigate the damaging impact of economic growth, governments should enhance the share of energy use from renewable sources.

Interconnected Forces: Analyzing Urbanization, Economic Growth, Energy Consumption, and Forest Area in the Top 10 Populous Nations’ CO2 Emissions

Economic progress is often seen as a means to enhance living standards, yet it often comes with an unintended consequence: a decline in environmental well-being. This research seeks to validate the Environmental Kuznets Curve (EKC) theory within the top 10 most populous nations and scrutinize the impact of urbanization, economic advancement, energy usage, and forest coverage on CO2 emissions. Utilizing data sourced from the World Development Indicator spanning from 2000 to 2019, this study employed a robust analytical approach known as the generalized method of moments (GMM) dynamic panel data, validated through Sargan and Arellano-Bond tests. The findings affirmed that economic growth, energy consumption, and forest area exerted significant influence on carbon dioxide emissions, aligning with the EKC hypothesis. However, contrary to expectation, urbanization didn't display a discernible impact on emissions, likely due to well-integrated transportation systems and higher educational standards prevalent in urban settings. This underscores the necessity for a sustainable economic growth strategy, advocating for industries with minimal pollution and eco-friendly products conducive to easy recycling. Furthermore, initiatives aimed at expanding forested areas should consider innovative techniques like vertical garden-based reforestation.

Investigation of the Effect of Energy Consumption on Carbon Emissions in Azerbaijan in the Context of the Environmental Kuznets Curve

There is a close and mutual relationship between environmental problems and economics. While the increase in economic activities causes environmental problems, environmental problems negatively affect sustainable economic growth. The main purpose of this study is to empirically investigate the effect of energy consumption on carbon emissions in the context of the Environmental Kuznets Curve (EKC) hypothesis in the Azerbaijan economy in the period 1997-2021. Data between energy consumption per capita, income per capita and carbon emissions were included in the analysis. The determination of this relationship was investigated by the Granger causality method. As a result of the analysis, it is clear that the Environmental Kuznets Curve Approach is not valid for Azerbaijan.

Nexus between Nuclear Energy, Economic Growth, and Greenhouse Gas Emissions in India

The escalating demand for fossil fuels in India has resulted in a significant strain on the environment due to the amplified emissions of greenhouse gases (GHGs). Nevertheless, India possesses a significant capacity for nuclear energy, as seen by its 22 operational nuclear reactors. This capacity holds promise for reducing GHG emissions. This research utilized a dataset spanning from 1969 to 2021 to examine the impact of nuclear energy utilization on GHG emissions. The study also aimed to verify the validity of the environmental Kuznets curve (EKC) hypothesis in India, employing the Autoregressive Distributive Lag (ARDL) model. The findings suggest that the EKC is applicable to India. Furthermore, it has been observed that a marginal increase of 1% in the use of nuclear energy leads to a reduction of GHG by 0.02% in the immediate term and 0.16% in the long term. This finding highlights the significance of expanding nuclear power as a crucial policy objective in order to attain environmentally friendly and sustainable economic development.

Exploring the asymmetric effect of fiscal policy instruments in encountering environmental degradation: proposing an SDG framework for India.

Asian countries are facing difficulties in attaining sustainable development goals (SDGs), and India is not an exception to it, with environmental degradation being one of the primary issues. Therefore, a policy-level reorientation may be required to address it. From this standpoint, fiscal policy instruments may come in handy towards fully integrating the SDGs into its agenda. The present investigation designs an SDG framework for India that could serve as an example for other Asian nations. This study introduces a new investigation exploring the relationship between fiscal policy instruments and environmental quality in India by examining the environmental Kuznets curve (EKC) hypothesis from 1990 to 2021. A nonlinear autoregressive distributed lag (NARDL) model is applied for empirical examination. The findings indicate that positive and negative shocks in fiscal policy instruments have significant impact on carbon emissions in both the long and short run. The study has also found evidence of an "inverted U-shape" EKC for India. These results are valuable from a policy perspective for India and other Asian countries to address environmental issues. The study has also outlined potential outcomes that may benefit India's fiscal policy in resolving environmental issues and attaining better economic growth. In the end, the study proposes a policy framework that supports SDG 7, SDG 8, SDG 12, SDG 13, and SDG 17 objectives.

Green logistics and circular economy in alleviating CO2 emissions: Does waste generation and GDP growth matter in EU countries?

The integration of Green Logistics (GL) and Circular Economy (CE) have been recognized as critical concepts for achieving sustainable economic and environmental performance. However, there is a lack of understanding on the combine impacts of CE and GL in alleviating CO2 emissions in pioneering nations relying on these concepts. This study examines the role of CE and GL sustainable in curbing CO2 emissions of 13 developed European Union (EU) countries from 2000 to 2020. The neoclassical growth and IPAT models, including the pool mean autoregressive distributed lags (PMG-ARDL) and the vector error correction model (VECM) are employed to estimate the short- and long-run effects and heterogeneous causal relationships. The long-run results reveal that CE and GL can mitigate CO2 (carbon dioxide) emissions, while the generation of municipal waste (GMW) has negative impact on the environment. Moreover, the long-run relationship between economic growth, CE, GL, and GMW validates the Environmental Kuznets Curve (EKC) hypothesis. The study also confirms a bidirectional causality between CE, GL, and CO2 emissions over the long run. This study proposes a model for assessing the impact of CE and GL initiatives on environmental performance and sustainability in both pioneering developed regions and emerging economies yet to embrace green growth concepts.

Nexus between Resource Utilization and Environmental Pollution: Evidence from 23 Countries in Africa

As Africa becomes more open to trade and globalization, emissions in the region continue to increase steadily. In the context of the prevailing economic and political conditions in Africa, it is anticipated that climate change shocks will impede developmental progress and hinder economic growth within the region. This research endeavors to empirically investigate the interconnections among GDP per capita, renewable energy consumption, freshwater withdrawals, forest area, and greenhouse gas emissions across 23 African nations from 2001 to 2020. The analytical framework incorporates the Pedroni cointegration test and the Fully Modified Ordinary Least Squares (FMOLS) method to establish a durable relationship among the variables under scrutiny.
 The outcomes of our investigation disclose that a 1% escalation in GDP per capita and freshwater withdrawals corresponds to an 87.75% and 16.93% increase in greenhouse gas emissions, respectively. Conversely, a 1% rise in renewable energy consumption and forest area manifests a decline in greenhouse gas emissions by 58.51% and 13.24%, respectively. The examination reveals a negative coefficient for GDP per capita squared, affirming the validity of the Environmental Kuznets Curve (EKC) hypothesis. Furthermore, the Pairwise causality test indicates bidirectional causation between renewable energy consumption and greenhouse gas emissions and between renewable energy consumption and GDP per capita. Additionally, unidirectional causality exists from GDP per capita to greenhouse gas emissions, freshwater withdrawals to GDP per capita, forest area to GDP per capita, and freshwater withdrawals to forest area. The study recommends the sustainable use of resources in order to achieve low emissions.

The impact of financial development and energy consumption on ecological footprint in economic complexity‐based EKC framework: New evidence from BRICS‐T region

AbstractThis study investigates the impact of financial development, nonrenewable energy, renewable energy, and trade openness on the ecological footprint from 1990 to 2020 under the new hypothetical imitations of the economic complexity‐induced environmental Kuznets curve (EKC) framework in BRICS‐T economies. After verifying the potential cross‐sectional dependency, this study employed second‐generation panel data tests to estimate the consistent, unbiased, and robust results. The key results of this research discover that the influence of economic complexity increases pollution at the initial stage; however, at the second stage such as the square of economic complexity significantly reduces it, which indicates the confirmation of the EKC hypothesis in these economies. Moreover, financial development and nonrenewable energy consumption significantly increase the level of ecological footprint. In contrast, renewable energy consumption curtails the pollution level in all quantiles. The results provide insight for government and policymakers to diminish the ecological footprint in BRICS‐T economies through clean energy technologies and diversification, such as carbon storage and capture.

Exploring the link between economic growth, energy consumption, and environmental pollution in G20

AbstractThis study examined the interplay between economic growth and environmental pollution in G20 countries, employing panel data analysis techniques. The primary aim was to assess the validity of the Environmental Kuznets Curve (EKC) hypothesis using contemporary econometric methods, while considering the pertinent literature. Preliminary findings of the study affirm the EKC hypothesis, which posits that environmental pollution initially escalates with economic growth but diminishes after surpassing a specific income threshold. Nevertheless, upon integrating per capita energy consumption into the analysis, the descending trajectory postulated in the inverted U‐shaped hypothesis emerged as statistically non‐significant. This undermines the EKC hypothesis's assertion that industrialized nations with elevated per capita incomes predominantly contribute to reduced environmental pollution. Consequently, in the context of developed nations, this research bolsters the prevailing consensus in scholarly discourse that economic growth augments resource consumption, thereby adversely impacting environmental quality.

Determining the environmental effect of Chinese FDI on the Belt and Road countries CO2 emissions: an EKC-based assessment in the context of pollution haven and halo hypotheses

This work aims to examines the effect of Chinese outward foreign direct investment (CoFDI), renewable energy, and energy intensity on CO2 emissions in 46 Belt and Road Initiative (BRI) nations divided into: Panel A, consisting of 16 European countries, and Panel B, comprising 30 Asian and MENA countries. This analysis used data from 2005 to 2018, applying second-generation econometric techniques. The empirical outcomes, obtained using Driscoll–Kraay methods, confirmed the pollution halo effect in Panel A, suggesting that FDI flows in these countries are environmentally friendly. In contrast, the results indicated a positive impact of CoFDI on CO2e in Panel B, supporting the pollution haven hypothesis that FDI may add to pollution. In addition, the study found an inverted-U-shaped association between per capita income and CO2e, validating the environmental Kuznets curve (EKC) hypothesis in both panels. The findings also revealed that energy intensity positively affects CO2e, whereas renewable energy has a significant negative effect in both panels, while the interaction terms of renewable and energy intensity are heterogenous in both panels. Based on these findings, the study recommends policy makers of these countries to attract clean FDI, particularly in renewable sectors, and shift from fossil fuel-based energy to renewable sources to control pollution by enacting energy-saving initiatives via lowering energy intensity.

Can tourism growth drive environmental improvements in the Eurozone economic space: A panel data analysis

Tourism extensively exploits natural resources and uses ecosystem services to expand its potential and increase market share. The present study investigates potential tourism's effects and causalities on the environmental quality levels in the context of the tourism-induced Environmental Kuznets Curve hypothesis (T-EKC). We conceptualize tourism as a function of its contribution to a country's Gross Domestic Product (GDP), whereas we consider capital investment spending directly connected with the travel and tourism sector as an additional determinant of environmental quality. We contextualize environmental degradation as a means of greenhouse gas emissions (GHGs), methane, and nitrous oxide emissions. Furthermore, our models include primary and energy consumption patterns to emphasize energy efficiency in limiting environmental degradation levels. This study's approach also discusses the role of renewables as an explanatory variable. This set of variables remains less visible in the relevant literature, whereas it extensively covers the T-EKC hypothesis concept. We process panel data analyses for the Eurozone member states from 1996 to 2019. Research findings confirm the inverted U-shaped curve for all models regarding tourism's contribution to GDP. Moreover, capital investment spending does not Granger cause air pollution. Additionally, the percentage of renewables should be increased from a long-term perspective since they decrease environmental degradation. Practical implications call for enhancing sustainable growth in the tourism system in light of energy efficiency issues and eco-friendly investments.